NY: Gold Continues Its Rise, While Asian Stocks Gain
SINGAPORE — Gold hit another all-time high on Wednesday on worries about future inflation and economic uncertainties, while Asian stocks rebounded as the generally bearish dollar kept riskier assets in demand.
Spot gold rose as high as $1,143.95 per ounce in early Asia trade, settling later just above $1,140, with expectations for a continued weakness in the U.S. currency also providing a support.
The dollar rose as investors trimmed short positions after euro zone economic policymakers followed U.S. Federal Reserve Chairman Ben Bernanke in commenting about the merits of a strong dollar, but dealers said the rebound would likely be limited.
“It’s going to be hard for the dollar to gain further, since it looks like that the U.S. will keep its low interest rate policy for a while,” said Tomohiro Nishida, treasury department manager at Chuo Mitsui Trust and Banking Company in Tokyo.
Expectations that the U.S. interest rates will stay low for some time have dragged down the dollar against major currencies and made global investors look for better returns from riskier trades, like emerging markets currencies and stocks.
U.S. President Barack Obama meets Prime Minister Wen Jiabao of China later in the day on his last day of visit, although his much anticipated meeting with President Hu Jintao on Tuesday failed to produce any visible impact on the markets.
The Nikkei 225 share average in Japan dipped Wednesday morning, hurt by falls in banking and real estate shares, but losses were limited because of the yen’s dip from a one-month peak against the dollar.
Shares in Japan Airlines fell to their lowest level since their 2002 re-listing on Wednesday after Japan’s transport minister said he had never said a court-led bankruptcy for the troubled airline was impossible.
The Nikkei dipped 0.1 percent to 9,716.35.
Seoul shares posted a three-week high, with financial stocks rising on views markets might have bottomed out. Expectations that private consumption would stay robust also bolstered domestic sales-focused stocks like Lotte Shopping after strong October retail sales data.
The Korea Composite Stock Price Index rose 1.1 percent to 1,603.30 points.
In China, the Shanghai index rose 0.3 percent, while the Hang Seng in Hong Kong was up 0.1 percent.
Taiwan rose 0.5 percent, and in Australia, stocks gained 0.7 percent on Wednesday, with miners leading gains across the board on record high gold and strong metals prices.
U.S. crude futures rose 54 cents to $79.68 a barrel in the morning in Asia, after settling up 24 cents on Tuesday, after an industry group reported a larger-than-expected drawdown in U.S. crude stocks last week.
