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Gold shines as Wall Street falters: Market turmoil and record highs

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2024-03-06

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Whatever mysterious negatives spooked equity markets—especially Wall Street—on Tuesday slipped by gold. While major Wall Street indexes saw their biggest one-day falls for weeks, gold bounced to a new record high.

Factors floating around the markets on Tuesday were the weak policy announcements from China, more worries about Gaza, speculation over a Federal Reserve interest rate pivot, and concerns about the growing size of major tech companies (where the falls were large).

On Tuesday, spot gold rose as much as 1.3% to hit a new record of $2,141.60 per ounce before paring its gains to 0.6%.

Comex gold futures had a similar run, peaking at $US2,150.50 per ounce then falling to $US2,137.30 an ounce just before 8 am Sydney time Wednesday.

That means gold has added about $US100 in the past five sessions, thanks to continuing expectations for monetary easing, geopolitical tensions, and the rising risk of a pullback in equity markets.

Helping was a sharp near 8-point pullback in the 10-year T-bond yield to just over 4.13%.

And the rise in the gold price and a weak Aussie currency (down to just above 65 US cents) saw the Aussie dollar gold price leap to around $US3,272 an ounce.

Even though Wall Street’s slide saw a fall in the overnight ASX 200 futures market for the start of trading Wednesday morning, the jump in gold prices should provide some support for local miners.

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