Gold rises to seven-week high, world stocks hit new records
US, CHINA ECONOMIC DATA BOOST EXPECTATIONS OF SOLID GLOBAL RECOVERY
Strong US and Chinese economic data bolstered expectations of a solid global recovery from the pandemic driving gold to a seven-week high and global stocks to new records on Friday.
Strong corporate earnings from US banks and in Europe, along with signs of economic recovery in countries leading the vaccination race helped stock markets end the week on a high.
“Investors and market participants continue to underestimate both the economic and earnings recovery,” Michael Arone, chief investment strategist at State Street Global Advisors in Boston, said. “The earnings numbers have continued to exceed expectations by a very wide margin.”
Dollar slides to 4-week low
Gold prices posted their biggest weekly percentage gain, about 4.5 per cent, since early November as the slide this week in Treasury yields and a weaker dollar brightened its appeal. US gold futures settled 0.8 per cent higher at $1,780.20 an ounce.
The dollar slid to a four-week low as investors increasingly accepted the Federal Reserve’s vow to keep an accommodative policy stance. The dollar index fell 0.14 per cent, with the euro up 0.13 per cent to $1.198. The yen weakened 0.02 per cent at 108.78 per dollar.
Fourth straight week of gains
MSCI’s broadest gauge of world stocks rose 0.42 per cent to an all-time peak, lifted by surging European shares and lesser gains on Wall Street where both the Dow Industrial and benchmark S&P 500 posted their fourth week of successive gains.
In Europe, the STOXX 600 index closed up 0.9 per cent at a new peak, while Germany’s DAX gained 1.3 per cent to hit an all-time high and the UK’s FTSE 100 rose 0.5 per cent to close at more than one-year highs.
On Wall Street, the Dow Jones Industrial Average rose 0.48 per cent and the S&P 500 gained 0.36 per cent, both setting new highs. The Nasdaq Composite added 0.1 per cent as declines in the information technology sector weighed.
Chinese data showing record 18.3 per cent growth in the first quarter drove Asian shares higher. MSCI’s broadest index of AsiaPacific shares outside Japan rose 0.4 per cent and Shanghai shares added 0.8 per cent. Japan’s Nikkei edged up 0.1 per cent.
“As the economic re-opening accelerates in the coming months, we believe the bull market remains on a solid footing,” said Mark Haefele, chief investment officer, UBS Global Wealth Management.