Gold Prices Surge Amid Fed Rate Cut Hopes; Global Stock Markets Show Mixed Movements – APM Capital Market Report – Mark Pussard, Head of Risk, APM Capital

On Monday, global stock markets exhibited a range of movements with major indices in the UK and Europe closing well in the red while in Asia stocks were mixed with losses in Hong Kong, and a tiny gain in China’s Shanghai. Japanese markets were closed for a public holiday. Australian stock markets did best.

US market

Demand for U.S. stocks rose sharply on Monday, the first trading day since Saturday’s assassination attempt on former President Donald Trump.

Prevailing sentiment indicates the prospects for Trump winning the 2024 presidential election has risen strongly since the assassination attempt.

The Dow Jones was the major beneficiary of the trend higher Monday, with the key benchmark index rocketing to a new record closing high of 40,211.72, up by 210.82 points or 0.53 percent. The rise in this index, which tracks 30 large, publicly-owned companies based in the United States hit a new all-time closing high.

The S&P 500, one of the most widely followed benchmarks, ended the day at 5,631.22, rising by 15.87 points or 0.28 percent. This gain highlights continued confidence in a broad range of sectors within the U.S. economy.

The NASDAQ Composite, known for its high concentration of technology stocks, finished at 18,472.57, gaining 74.12 points or 0.40 percent. This uptick underscores the sustained strength of the technology sector amidst ongoing innovation and growth.

European market

European shares were lower on Monday, as traders analyzed the potential impact of the attempted assassination of US presidential candidate Donald Trump on markets, along with weak China GDP data.

The German DAX PERFORMANCE-INDEX dropped by 157.29 points or 0.84 percent, closing at 18,590.89.

In London, the FTSE 100 closed at 8,182.96, falling by 69.95 points or 0.85 percent.

Asian market

Asia-Pacific markets mostly declined on Monday, as investors reacted to disappointing economic data from China and the fallout from an assassination attempt on former US president Donald Trump over the weekend.

Japan Nikkei 225 was closed due to a national holiday.

The HANG SENG INDEX in Hong Kong on Monday dropped significantly by 277.44 points or 1.52 percent, ending at 18,015.94.

However, the BSE Sensex and Nifty50, Indian equity benchmark indices, saw record closing highs in trade on Monday. While BSE Sensex closed above 80,600, Nifty50 was above 24,550. BSE Sensex ended the day at 80,664.86, up 146 points or 0.18%. Nifty50 closed the day at 24,586.70, up 85 points or 0.35%.

Commodities

Gold prices gained on Monday, hovering near a more than one-month high hit last week, aided by hopes for interest rate cuts from the Federal Reserve as traders await for more comments from Fed officials to gauge the timing of those cuts. Spot gold rose 0.4% at $2,421 per ounce, edging nearer to its all-time high of $2,449.89 per ounce reached on May 20.

Silver prices remained at familiar levels on Monday, printing minimal losses of 0.28% as US Treasury bond yields from the belly and long-end curve edged higher. The XAG/USD traded at $30.69 after hitting daily highs of $31.08 a troy ounce.

West Texas Intermediate (WTI) Crude Oil tested into the south end of the $81.00 handle on Monday as Crude Oil’s bullish break out of recent consolidation fizzles out. 

Forex

On Monday, the global foreign exchange market exhibited mixed movements among major currency pairs, reflecting varied economic conditions and investor sentiment.

The euro (EUR) experienced a slight decline against the U.S. Dollar (USD), with the EUR/USD pair dipping to 1.0898, down by 0.05 percent. This minor dip indicates a continued cautious outlook on the Eurozone’s economic prospects.

Conversely, the dollar showed a modest gain against the Japanese Yen (JPY). The USD/JPY pair closed at 157.96, rising by 0.04 percent.

The greenback also strengthened against the Canadian Dollar (CAD), with the USD/CAD pair firming to 1.3673, up by 0.28 percent.

The British pound (GBP) fell to 1.2969, down by 0.13 percent, highlighting ongoing concerns over the UK’s economic stability.

Against the Swiss Franc (CHF), the dollar showed positive movement. The USD/CHF pair edged up to 0.8956, gaining 0.14 percent.

The Australian dollar (AUD) weakened against the U.S. Dollar. The AUD/USD pair dropped to 0.6761, down by 0.32 percent, reflecting investor concerns over Australia’s economic outlook and commodity price fluctuations.

Similarly, the New Zealand Dollar (NZD) declined against the dollar. The NZD/USD pair fell to 0.6077, down by 0.65 percent, as market participants reacted to economic data and central bank policies.

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