TOKYO: Gold hit an all-time high on Monday as tit-for-tat consulate closures in China and the United States rattled investors, boosting the allure of safe haven assets, although sentiment was mixed with tech gains supporting some Asian stocks.
MSCI’s ex-Japan Asia-Pacific index rose 1.3% as Taiwan’s TSMC, Asia’s third-largest company by market capitalisation, rose almost 10%.
The chipmaker’s gains boosted other tech stocks in the region and came after rival Intel signalled it may give up manufacturing its own components due to delays in new 7 nanometer chip technology.
Also soothing sentiment, Chinese shares eked out gains after big falls late last week, with CSI300 index rising 0.5%.
S&P500 futures were last up 0.4% in choppy trade while Japan’s Nikkei fell 0.5%, resuming trade after a long weekend and catching up with falls in global shares late last week.
Global shares had lost steam last week after Washington ordered China’s consulate in Houston to close, prompting Beijing to react in kind by closing the US consulate in Chengdu.
US Secretary of State Mike Pompeo took fresh aim at China last week, saying Washington and its allies must use “more creative and assertive ways” to press the Chinese Communist Party to change its ways.
“US President (Donald) Trump used to say China’s President Xi Jinping is a great leader. But now Pompeo’s wording is becoming so aggressive that markets are starting to worry about further escalation,” said Norihiro Fujito, chief investment strategist at Mitsubishi Securities.
Gold rose 1.0% to a record high of $1,920.9 per ounce , surpassing a peak touched in September 2011, as Sino-US tensions boosted the allure of safe haven assets, especially those not tied to any specific country.
The yellow metal is also helped by aggressive monetary easing adopted by many central banks around the world since the pandemic plunged the global economy into a recession.
Some investors fret such an unprecedented level of money-printing could eventually lead to inflation.
Hopes of a quick US economic recovery are fading as coronavirus infections showed few signs of slowing.
That means the economy could capitulate without fresh support from the government, with some of earlier steps such as enhanced jobless benefits due to expire this month.
Investors hope US Congress will agree on a deal before its summer recess but there are some sticking points including the size of stimulus and enhanced unemployment benefits.
US Treasury Secretary Steve Mnuchin said the package will contain extended unemployment benefits with 70% “wage replacement”.
Democrats, who control the House of Representatives, want enhanced benefits of $600 per week to be extended and look to much bigger stimulus compared with the Republicans’ $1 trillion plan.
Investors are looking to corporate earnings from around the world for hints on the pace of recovery in the global economy.
“It looks like rising coronavirus cases are starting to slow down recovery in many countries,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.
Concerns about the US economic outlook started to weigh on the dollar, reversing its inverse correlation with the economic well-being over the past few months.
The dollar index dropped 0.3% to its lowest level in nearly two years.
The euro gained 0.3% to $1.1693, hitting a 22-month high of $1.16590 as sentiment on the common currency improved after European leaders reached a deal on a recovery fund in a major step towards more fiscal co-operation.
Against the yen, the dollar slipped 0.5% to 105.605 yen , a four-month low while the British pound hit a 4 1/2-month high of $1.2832.
Oil prices dipped on worries about the worsening Sino-US relations.
Brent futures fell 0.46% to $43.14 per barrel while US crude futures lost 0.44% to $41.11.
Dhading, August 3 In view of increasing deaths related to river mining, the authority in Dhading decided to impose a complete ban on sand mining from rivers in the district during the monsoon season. There is already a rule that bans mining of river products using heavy equipment during the ra Read More...
Bhaktapur, August 3 Prime Minister and Co-chair of the ruling Nepal Communist Party (NCP) KP Sharma Oli today visited his private residence at Balkot and met with people from different walks of life. This is the third time the prime minister has visited his private residence after being electe Read More...
Kathmandu, August 3 Women and Social Welfare Committee of the House of Representatives has directed the home ministry to make some amendments to the legal arrangement and punishment related to incidents of acid attack, pointing out the need of timely revision. After the discussion held on ‘a Read More...
Dhangadi, August 3 Flood victims of Kailali’s southern region have complained that they have not received relief for the past six days. The victims who were displaced and are staying in the open now are making do with noodles, biscuits and water provided by local levels concerned and various Read More...
The House panel listed positive effects of proper forest management Biratnagar, August 3 The implementation of scientific forest management programme has led to improvement in the status of forests in eastern Nepal. Increase in revenue collection, replacement of timber import, gradual increas Read More...
Rajbiraj, August 3 After the trend of registering false details increased among the COVID-suspects at the time of swab collection, Saptari District Health Office has made it mandatory to produce citizenship certificate or any other ID card for swab collection. Around a dozen people, who had th Read More...
Jajarkot, August 3 Food stuffs were supplied to landslide hit areas in Jajarkot district. Food Management and Trade Company Ltd supplied food stuffs at Barekot Rural Municipality, where 14 people lost their lives and more than 1,200 people were displaced due to landslides on July 9. The com Read More...
UNITED NATIONS: UN Secretary-General Antonio Guterres warned on Tuesday that the world faces a "generational catastrophe" because of school closures amid the coronavirus pandemic and said that getting students safely back to the classroom must be "a top priority." Guterres said that as of mid Read More...