Gold surpassed $3,000 for the first time Friday as US President Donald Trump’s trade wars boost the safe-haven asset, while stock markets bounced on hopes US lawmakers will avert a government shutdown.
US shares rose in early deals after slumping in recent sessions while Asian equities ended the week on a positive note.
European stock markets were also given a lift in afternoon deals after Germany moved closed to approving a massive infrastructure and defence spending programme.
In Washington, with just hours until a deadline to push a Republican spending bill through, Senate Democratic leader Chuck Schumer dropped his threat to block it.
The package would keep government operating through September, but Democrats have come under pressure from their grassroots to defy the plan, which they say is full of harmful spending cuts.
Stocks gained support from “a burgeoning sense that a government shutdown will be averted after Senator Schumer said he will vote for House-passed continuing resolution,” said Patrick O’Hare, analyst at Briefing.com.
O’Hare said stocks were also getting a boost from speculation China will announce more stimulus measures, and from reports that meetings between Canadian and US officials may have made some progress towards easing trade tensions.
London’s FTSE 100 index rose as the pound dropped against the dollar, after data showed the UK economy unexpectedly shrank in January.
In the eurozone, Paris and Frankfurt both rebounded after losses the previous day on US tariff threats.
Germany’s likely next chancellor Friedrich Merz said his conservatives had struck a deal with the Greens on massively boosting defence and infrastructure spending, paving the way for the plan’s approval in parliament.
– Times of uncertainty –
Gold, a safe haven in times of uncertainty, rose as much as $3,004 an ounce before paring back gains later in the day to trade under $3,000.
The precious metal was “boosted on increased haven demand amid trade war risks and recent stock market volatility”, said Fawad Razaqzada, analyst at City Index and Forex.com.
In the latest salvo, Trump threatened to impose 200 percent tariffs on wine, champagne and other alcoholic beverages from European Union countries.
His threat came after the bloc’s planned levies on American-made whiskey and other products in retaliation to US levies on steel and aluminium.
Trump said he would not row back on the metals duties, nor plans for sweeping tariffs on countries worldwide due to kick on April 2.
Wall Street has been hammered in recent sessions by trade tensions, with the S&P 500 slipping into a correction Thursday, having fallen more than 10 percent from its recent peak — a record high touched just last month.
In company news, shares in Gucci-owner Kering slumped more than 11 percent in Paris as the group appointed a new creative director to helm its struggling flagship brand.
Shares in BMW were in the red as the Germany automaker warned that trade tensions between the United States, Europe and China would cost the company $1 billion this year.
Major conglomerate CK Hutchison Holdings — owned by tycoon Li Ka-shing — tumbled in Hong Kong after Chinese officials in the city reposted an newspaper opinion piece attacking the firm over its sale of a controlling stake in Panama ports under pressure from Trump.
It had surged as much as 25 percent after the sale last week.
– Key figures around 1340 GMT –
New York – Dow: Up 0.6 percent at 41,037.37 points
New York – S&P 500: UP 1.1 percent at 5584.42
New York – Nasdaq Composite: UP 1.8 percent at 17,611.92
London – FTSE 100: UP 0.5 percent at 8,583.13 points
Paris – CAC 40: UP 0.9 percent at 8,012.07
Frankfurt – DAX: UP 1.6 percent at 22,940.17
Tokyo – Nikkei 225: UP 0.7 percent at 37,053.10 (close)
Hong Kong – Hang Seng Index: UP 2.1 percent at 23,959.98 (close)
Shanghai – Composite: UP 1.8 percent at 3,419.56 (close)
Euro/dollar: UP at $1.0893 from $1.0849 on Thursday
Pound/dollar: DOWN at $1.2939 from $1.2948
Dollar/yen: UP at 148.57 yen from 147.75 yen
Euro/pound: UP at 85.40 pence from 83.75 pence
Brent North Sea Crude: UP 0.3 percent at $70.14 per barrel
West Texas Intermediate: UP 0.3 percent at $66.81 per barrel
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