NEW YORK, Dec 25 — Gold surged past US$1,500 (RM6,209) an ounce and a gauge of global equity markets hovered near record highs on Tuesday in a year-end rally spurred by hopes of a US-Sino Phase 1 trade deal and as China's latest policy easing pledge added to investor optimism.
President Donald Trump said he and Chinese President Xi Jinping will sign the initial phase of the pending trade pact in a ceremony, the latest remarks by the US leader to flag the deal is close to being finalised.
European stocks ground out fresh record gains as did the Nasdaq on Wall Street as equities remained on track to post their best year in a decade.
The pan-European Stoxx 600 index added 0.14 per cent as it touched an all-time high and the domestically focused mid-cap index in Britain rose 0.63 per cent to hit a new high.
France's CAC 40 and Spain's Ibex 35 both closed little changed, while German, Italian and Swiss country indexes were closed for the day.
Blue-chip shares in China rose 0.7 per cent after Premier Li Keqiang said the government was considering more measures to lower corporate financing costs and hinted at “targeted” cuts in banks' reserve requirement ratio.
Gold passing US$1,500 was big news in a quiet Christmas Eve session as it suggested investors may be hedging against a possible inflation hike next year, said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
Arone said he doubted inflation will be strong enough to negatively affect the market, but it could provide a jolt to investors lulled by interest rates below the historic norm.
“Even today with lighter volumes and high absenteeism, gold has breached US$1,500,” he said.
“To me it's indicative of this idea that potentially you could have an inflation scare in 2020 and perhaps investors are beginning to position themselves for such a scare,” Arone said.
US gold futures rose more than 1 per cent to hit a high of US$1,505.00 an ounce.
On Wall Street, the Dow Jones Industrial Average fell 36.08 points, or 0.13 per cent, to 28,515.45. The S&P 500 lost 0.63 points, or 0.02 per cent, to 3,223.38 and the Nasdaq Composite added 7.24 points, or 0.08 , to 8,952.88.
The US dollar was little changed against the euro and Japanese yen in holiday-thinned trading and US Treasury yields rose, bolstered by a strong auction of five-year notes. Euro zone bond markets were shut.
The US dollar index rose 0.03 per cent, with the euro down 0.03 per cent to US$1.1083. The yen strengthened 0.03 versus the greenback to 109.37 per US dollar.
Benchmark 10-year notes last rose 9/32 in price to yield 1.9031 per cent.
Oil prices rose after Russia said cooperation with the Organisation of the Petroleum Exporting Countries on supply cuts would continue and amid optimism that the United States and China could finalise the trade pact.
Brent crude settled up 81 cents at US$67.20 a barrel, while US West Texas Intermediate rose 59 cents to settle at US$61.11 a barrel. — Reuters
