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Gold flirts with record high

The price of a troy ounce of gold hit a record high on the London Stock Exchange yesterday, both in US dollars and euros. One reason for this is speculation about falling interest rates. With this in mind, the testimony of Federal Reserve Chairman Jerome Powell in Washington and the release of the Federal Reserve's Beige Book economic report are eagerly awaited today. Meanwhile, investors on the New York Stock Exchange took a step back yesterday after the recent record run. 

Alessandro Fezzi, LGT
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5 minutes
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The price of gold continued to soar, at one point hitting a new record high of USD 2,141 per troy ounce. This means that the precious metal has gained around USD 100 per ounce since the end of February. This is likely to have been driven by expectations of monetary easing by the major central banks and ongoing geopolitical risks, particularly in the Middle East.

On Wall Street, investors were cautious after the recent record rally and ahead of important new monetary policy signals. The Dow Jones Industrial and S&P 500 fell by around 1% to 38,585.19 and 5,078.65 respectively. On the Nasdaq, the tech-heavy indices lost 1.8%. After hopes of near-term interest rate cuts, a strong earnings season and, in particular, the hype surrounding artificial intelligence (AI) had boosted technology stocks, profit-taking seems to have set in. Apple shares fell almost 3% in US trading after a report from Counterpoint Research showed that iPhone sales in China slumped in the first six weeks of the year. In the bond market, the yield on ten-year US Treasuries fell to 4.14%.

Sentiment in the US services sector cooled more than expected in February. This was signalled by the ISM purchasing managers' index, which fell from 53.4 to 52.6 points. The consensus forecast was for a softening, but only to 53.0. According to the Institute for Supply Management, the business climate is broadly positive, mainly due to improved orders, but is being weighed down by inflation and ongoing geopolitical conflicts.

Asia-Pacific markets erased early losses on Wednesday and were mostly higher, with Hong Kong stocks leading gains in the region. The Hang Seng Index rose more than 2%, while mainland Chinese stocks fell, with the CSI 300 down 0.6%. Japan's Nikkei 225 was slightly lower, closing above the 40,000 mark for the third day in a row, while the broader Topix was up 0.4%. South Korea's Kospi fell 0.3%, while the small-cap Kosdaq gained 0.5%. Shares of Samsung Electronics fell 1.1%. In Australia, the S&P/ASX 200 rose only marginally despite stronger than expected growth in the Australian economy in the fourth quarter. Gross domestic product rose by 1.5% year-on-year, slightly more than expected.

In the eurozone, private sector sentiment improved in February. S&P Global's monthly Purchasing Managers' Index (PMI composite) for the eurozone manufacturing and services sectors rose from 47.9 points in January to 49.2 points in February, the highest level since June 2023. The PMI for the services sector improved from 48.4 to 50.2, rising above the growth threshold of 50 points for the first time since July last year.

Corporate news in focus: Q4 results from Pirelli and Abercrombie Fitch.

Economic data in focus: German trade balance, Eurozone retail sales, US ADP private sector employment and the Federal Reserve's Beige Book, as well as the Bank of Canada's interest rate decision.


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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Lten steht Ihnen ein Berater der Bank gerne zur Verfügung.

Herausgeber: LGT Bank (Schweiz) AG, Glärnischstrasse 36, CH-8027 Zürich
Redaktion: Alessandro Fezzi
Quelle: LGT Bank (Schweiz) AG

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