July 18, 2024

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Gold Hits Record, Bitcoin Climbs Amid Fed Cut Bets: Markets Wrap

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(Bloomberg) — Gold surged to a fresh record and Bitcoin pierced $40,000 in Asian trading as markets shrugged off Federal Reserve Chair Jerome Powell’s reminder that policymakers are in no hurry to ease interest rates.

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The precious metal jumped as much as 3.1% to $2,135.39 an ounce and Bitcoin climbed more than 2.5%. Asian shares were mixed, with a gain in Australian, Korean and Hong Kong stocks, while Japanese and mainland Chinese equities fell. US equity futures were steady.

“Markets are piling in on the rate cut bets,” said Kyle Rodda, a senior market analyst at Capital.com in Melbourne. “Gold can run higher and will do at the earliest sign of a recession.”

The rally in gold and Bitcoin comes even as the dollar edged higher and policy sensitive two-year Treasuries pared Friday’s strong gains, as traders held bets the Fed could cut as early as March. Swaps have priced a full reduction by May and project a full point of easing by December 2024. Powell on Friday noted the central bank is ready to hike further if needed, though policy is “well into restrictive territory.”

US stocks closed at their highest since March 2022 and two-year yields at their lowest since June on Friday as signs pile up that after defying expectations all year and splurging over the summer, American households are starting to pull back. A measure of US factory activity shrank for a 13th straight month in November as high interest rates continue to hammer the goods-producing side of the economy.

“The big rebound in shares has left them technically overbought and at risk of a consolidation or short term pull back,” Shane Oliver, head of investment strategy and chief economist at AMP Ltd. in Sydney, wrote in a note to clients. “However, further gains are likely into year end and early next year as inflation continues to ease” and positive market seasonality kicks in later this month, he said.

Elsewhere, Bitcoin neared $41,000,…

2023-12-03 21:13:19

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