Gold prices reached another historic high on Tuesday while oil prices continued to rise due to escalating tensions in the Middle East. However, stock markets faced pressure as investors questioned whether the recent rally had peaked.
The surge in gold prices, climbing as high as $2,266.85 per ounce in morning London trading, is driven by a combination of factors including expectations of interest rate cuts in the near future. Geopolitical tensions, particularly in the Middle East, have also bolstered gold’s appeal as a safe haven asset.
Analysts suggest that gold prices are likely to rise further as traders anticipate interest rate cuts by major central banks such as the European Central Bank, Bank of England, and the US Federal Reserve. Lower interest rates make gold more attractive compared to other fixed-income assets like bonds.
On the other hand, oil prices saw gains amid escalating tensions between Iran and Israel following an airstrike in Syria’s capital, Damascus. This raised concerns about the potential spillover of conflicts in the region, contributing to oil’s upward trajectory.
In equities markets, major indices in New York opened lower following a mixed performance in the previous session. Concerns about inflationary pressures resurfaced after data showed an expansion in US manufacturing activity alongside a rise in prices paid, prompting speculation about the Fed’s interest rate policy.
While some analysts express caution about the sustainability of the recent stock market rally, others point to factors such as rising oil prices and increasing government debt servicing costs as potential risks to market stability.
In Europe, stock markets traded in negative territory, with London briefly touching record highs before retreating. Paris and Frankfurt also saw subdued trading following the Easter break.
In Asia, Hong Kong stocks rallied on upbeat Chinese factory data, signaling optimism about the region’s economic prospects. However, other Asian markets experienced mixed results amid ongoing geopolitical uncertainties and concerns about global economic growth.
Key figures around 1430 GMT
New York – Dow: DOWN 0.9 percent at 39,226.92 points
New York – S&P 500: DOWN 0.8 percent 5,201.92
New York – Nasdaq Composite: DOWN 1.2 percent at 16,201.33
London – FTSE 100: DOWN 0.1 percent at 7,944.69
Paris – CAC 40: DOWN 0.8 at 8,140.05
Frankfurt – DAX: DOWN 09. percent at 18,331.79
EURO STOXX 50: DOWN 0.5 percent at 5,056.84
Tokyo – Nikkei 225: UP 0.1 percent at 39,838.91 (close)
Hong Kong – Hang Seng Index: UP 2.4 percent at 16,931.52 (close)
Shanghai – Composite: DOWN 0.1 percent at 3,074.96 (close)
Dollar/yen: UP at 151. yen from 151.65 yen on Monday
Euro/dollar: DOWN at $1.0762 from $1.0746
Pound/dollar: UP at $1.2561 from $1.2552
Euro/pound: UP at 85.66 pence from 85.59 pence
Brent North Sea Crude: UP 1.4 percent at $88.65 per barrel
West Texas Intermediate: UP 1.6 percent at $85.04 per barrel
