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Gold hits new all-time high, stocks ease


MSCI’s gauge of stocks across the globe dropped 0.36%

Gold prices reached new all-time highs on Monday with stocks on Wall Street ending mixed as hopes that the Fed was near to reducing interest rates faded due to a strong U.S. economy that rebuts the need for cuts anytime soon.

Chinese shares led a rally around most of Asia overnight amid a widely optimistic global economic backdrop, while the dollar gained after data showed the U.S. manufacturing sector grew in March for the first time since September 2022.

What had been an optimistic reading of key U.S. inflation last week soon darkened as the market weighed the strength of the U.S. economy vs. the need for immediate rate cuts.

The three government measures of U.S. inflation – CPI, PPI and PCE – show improvement has levelled off, leading to questions about when and by how much the Fed cuts, according to Kevin Flanagan, head of fixed income strategy at WisdomTree in New York.

The markets are re-evaluating what they thought was going to be a very aggressive rate-cut episode, he added.

Whether they go in June or July, whatever, what is it going to look like? Right now, the data would be showing you that it is not going to be uniform, he said.

Oil prices hovered near five-month highs as markets expect tighter supply due to OPEC+ cuts and after attacks on Russian refineries, with Chinese manufacturing data supporting a stronger demand outlook.

The dollar index, a measure of the U.S. currency against six major rivals, added 0.47%.

MSCI’s gauge of stocks across the globe dropped 0.36%.

On Wall Street, the DJIA dropped 0.6% and the S&P 500 shed 0.20%, but the Nasdaq Composite advanced 0.11%.

European markets were shut on Monday and most markets across the globe were shut on Friday.

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