Premarket: Gold glitters as U.S. election nerves grow, strong greenback dents stocks

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‘Trump trade’ dominates sentiment

Gold prices hit record highs on Wednesday, defying the dollar’s rise, which kept pressure on the yen and the euro, while global stocks edged lower on investors’ reluctance to place major bets ahead of the U.S. election in two weeks.

U.S. Treasuries have taken a battering, sending yields to three-month highs and pushing the dollar to multi-month peaks against the euro, sterling and the yen, which is now back at 150 per dollar levels, prompting verbal warnings from Japanese officials. “This week’s stock market price action suggests that the 50th record high for the S&P 500 could be a tough ask with the US election so close,” XTB research director Kathleen Brooks said.

The prospect of another Trump presidency has been in focus for investors, as his policies include tariffs and restrictions on undocumented immigration, among other measures, that are expected to push up inflation.Gold has shrugged off the strength in the U.S. currency and rallied to a new record high of $2,757.99 an ounce.

“The Treasury sell-off has deepened this week as markets acknowledge that the Fed risks reigniting inflation if it eases into a strong economy,” said Prashant Newnaha, a senior Asia-Pacific rates strategist at TD Securities.

 

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