Gold Steady at Record Levels Amid Fed Decision and Wall Street Losses: Goldprices remained stable near record levels during Wednesday’s trading as demand
Demand for safe-haven assets persisted amid global market caution
and anticipation of the Federal Reserve’s meeting to decide on interest rates.
This comes as Wall Street faces sharp losses amid growing concerns
about an economic slowdown under U.S. President Donald Trump’s leadership.
Spot gold traded at $3,031 per ounce after hitting a record high of $3,038.33.
This was supported by increased demand for safe assets amid deteriorating U.S. economic forecasts
and rising concerns about the impact of the Trump administration’s protectionist trade policies.
On the other hand, U.S. markets saw a broad sell-off, with the Dow Jones falling by 0.75% to 41,536 points,
the S&P 500dropping by 1% to 5,617 points, and the Nasdaq declining by 1.55% to 17,533 points.
Tech stocks were heavily impacted, with Nvidialosing 2.1% to $117, Tesladropped 4.55% to $227.2, and Metaregistered a 4% decline to $580.85.
As attention shifts to Federal Reserve Chairman Jerome Powell’s comments after the meeting today,
markets are awaiting clearer signals on the future of U.S. monetary policy,
especially with growing concerns about the impact of tariffs imposed
by the Trump administration on key trade partners like Mexico and Canada,
which could lead to higher prices and increased inflationary pressures.
In Asian markets, goldsaw little change at $3,032.66 per ounce,
while silverand platinumprices declined, and palladiumremained steady.
The U.S. dollar index remained unchanged as investors continued
to monitor global market trends amidst increasing economic uncertainty.
Asian Stocks Rise Following Fed Decision and Tech Earnings: Asian stocks saw a slight increase on Thursday as investors assessed the Federal Reserve’s decision
to pause interest rate hikes and the earnings reports from major U.S. tech companies.
At the same time, the Japanese yen strengthened ahead of a speech by a central bank official.
Japanese stocks rebounded after an earlier decline, helping to boost the broader Asian stock index.
However, several major regional stock markets,
including Hong Kong, mainland China, and South Korea, remained closed due to the Lunar New Year holiday.
Now, the focus shifts to a speech by Bank of Japan Deputy Governor Ryozo Himino,
scheduled for 3:10 PM Tokyo time.
Last week, the Bank of Japan raised interest rates,
and traders believe that the Federal Reserve’s indication of a cautious approach
Rate cuts could give Himino room to adopt a more hawkish stance.
Shoki Omori, global strategist at Mizuho Securities in Tokyo, stated: “Himino has the opportunity to take a more optimistic view on further rate hikes,
and he may even adjust the language in the latest monetary policy statement.
Given that markets are not pricing in immediate rate hikes,
the yenwill likely strengthen quickly if Himino’s speech sounds hawkish about Japan’s economy and inflation.”
Tech Stocks Movements
According to an Asia-based currency dealer,
the Yen gained up to 0.5% against the dollar as fast-money traders placed bets on it.
During the U.S. trading session, investors in the region had plenty to consider,
though no clear direction emerged for the markets.
The Federal Reserve’s decision to keep interest rates unchanged was widely expected,
while earnings reports from major tech companies IBM, Meta, Microsoft,and Tesla sent mixed signals to investors.
Tesla’sshares rose after the company stated that it expects an increase in car sales this year following a challenging 2024, Meta’sstock rebounded after an initial dip post-earnings announcement, IBMshares surged due to better-than-expected sales and earnings, Microsoftshares declined due to slower growth in its cloud
computing business during the last three months of the previous year. Meanwhile, SoftBank shares fluctuated following
a report that the company is considering a $25 billion investment in OpenAI. Recent volatility among tech giants has been a major concern for Wall Street.
The performance of the S&P 500 has become increasingly dependent on a small number of companies,
a trend not seen in over twenty years. According to Michael Hartnett, a strategist at Bank of America,
data shows that less than one-third of S&P 500 companies have outperformed the index in the past two years.
U.S. futures showed slight gains, suggesting a potential recovery of major indexes after Wednesday’s small declines.
Fed’s Language Shift
Some traders searched for signals in the Federal Reserve’s statement,
as it removed a reference to progress toward its 2% inflation target.
Fed Chair Jerome Powell later clarified that this was simply
a shorter version of a previously longer statement, not an indication of a shift in monetary policy.
Win Thin, head of global market strategy at Brown Brothers Harriman in New York, commented: “I find it hard to believe, especially since the Fed knows that markets scrutinize every word and sentence.”
The dollar fell against a Bloomberg-tracked basket of currencies,
though it remained stable against the Euro and the British pound.
Reserve Bank of Australia Assistant Governor Brad Jones is set to speak on Thursday,
following weaker-than-expected inflation data for Q4.
According to Bloomberg Exchange data,
while traders have increased bets that the central bank may begin cutting rates next month,
markets have yet to fully price in a 25 basis-point cut.
Oil Prices Stability Amid Uncertainty Over U.S. Trade Policies
Oil prices remained stable in the commodities market as investors awaited more clarity on U.S. trade policy plans.
This comes after Donald Trump’s Commerce Secretary nominee stated that
Canada and Mexico might be able to avoid new tariffs under the next administration’s trade policies.
Asian Stocks Rise Following Fed Decision and Tech Earnings
