* Gold surges past key technical barrier of $2,000 an ounce
* Falling U.S. dollar, bond yields push gold higher
* Asian shares mixed on rising pandemic costs, uncertainty
By Swati Pandey
SYDNEY, Aug 5 (Reuters) - Gold scaled a new high on
Wednesday as a weaker dollar and falling bond yields burnished
its safe-haven appeal, while shares ticked higher as investors
turned their focus to stepped-up monetary and fiscal support
globally.
Spot gold XAU= jumped to a record high of $2,030.72 per
ounce on Wednesday as bond yields hit new lows. Prices have
soared about 33% this year. GOL/
Risk assets such as equities have surged in recent months on
massive policy stimulus from central banks and governments, but
gold has also rallied in a sign of heightened uncertainty around
the long-term effects of the global health crisis.
European futures STXEc1 started in green with Germany's
DAX futures FDXc1 up 0.4% and those for France's CAC40 FCEc1
up 0.2%. Futures for London's FTSE FFIc1 rose 0.37% while
E-minis for the S&P 500 ESc1 reversed early losses to climb
0.2%.
Analysts said equities would struggle a bit until the U.S.
Congress agrees on a stimulus package and ahead of corporate
earnings from tech giants later in the week.
White House negotiators have vowed to work "around the
clock" to reach a spending deal by the end of the week.
Markets also latched on to comments from the president of
Federal Reserve Bank of San Francisco that the U.S. economy will
need more support than initially thought, sending long-term
Treasury yields into a downward spiral.
"Failure to agree to another round of stimulus would hit the
U.S. economy hard at a time when high-frequency data suggests it
is losing some momentum," said Tapas Strickland, analyst at
Melbourne-based National Australia Bank.
The United States has reported more than 4.7 million
coronavirus cases and over 157,000 deaths, the highest globally.
On Wednesday, MSCI's broadest index of Asia Pacific shares
outside of Japan .MIAPJ0000PUS rose 0.5% to a 6-1/2 month peak
at 563.28 points.
Japan's Nikkei, off 0.3% and Australia's benchmark index
.AXJO , down 0.6%, were notable underperformers in Asia while
Chinese shares were mildly weaker though still near a recent
five-year peak. .CSI300
South Korea's Kospi .KSII bucked the trend to hit its
highest level since October 2018.
On Wall Street, the Dow .DJI had ended up 0.6% on Tuesday,
the S&P 500 .SPX rose 0.4% and the Nasdaq Composite .IXIC
added 0.4%. .N
"Significantly increased odds" of more monetary policy
stimulus from the U.S. Federal Reserve is a key driver of
equities although the rally has been reined in by stretched
valuations, Mizuho analysts wrote in a note.
More central bank support is also dragging U.S. Treasury
yields lower, led by the long-end of the curve, and helping
"fire-up gold's glitter", they added.
GREENBACK UNDER PRESSURE
The dollar was under pressure USD= with the safe-haven
Japanese yen JPY= rising to 105.64 as the bond market's dim
view of the U.S. recovery sent real yields further into negative
territory and nominal yields near record lows. US/
The risk-sensitive Australian dollar AUD=D3 has risen more
than 2% so far this year while the euro EUR= has climbed over
5% against the greenback.
The Aussie was last up 0.3% at $0.7184 while the common
currency was inching toward a two-year high at $1.1811,
buttressed by hardening perception that the U.S. rebound is
lagging Europe. FRX
Investors are now waiting for an Aug. 15 video conference
where senior U.S. and Chinese officials are set to review a
trade deal and likely air mutual grievances, according to
sources. China's U.S. envoy on Tuesday said Beijing does not want
tensions to escalate. In commodities, oil prices reversed early losses with Brent
crude LCOc1 up 5 cents at $44.48 a barrel. U.S. crude CLc1
added 2 cents to $41.72. O/R
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Tracking the spread of the novel coronavirus https://graphics.reuters.com/CHINA-HEALTH-MAP/0100B59S39E/index.html
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>