Gold prices remain near record highs; Fed cut bets prompt weekly gains
Investing.com - Canada’s main stock exchange were slightly lower on Monday retreating from a fresh all-time peak the index touched end of the last trading week.
By 4.01 ET, the S&P/TSX 60 index standard futures contract was down by 1.97 points, or 0.11%.
The S&P/TSX composite index ended down by 22 points or 0.08% at 29,027.73.
Index gained 0.5% on Friday to end at 29,050.63, surpassing a previous record high logged in the preceding session.
It was the eighth consecutive day of gains for the average, extending its winning streak to its longest since May.
Underpinning the sentiment were figures showing that Canada’s economy lost 65,500 roles in August, while its unemployment rate moved up to 7.1%. The numbers further bolstered wagers that the Bank of Canada will slash interest rates at its policy gathering next week.
A soft labor market report out of the U.S. also boosted bets that the Federal Reserve will cut rates at the end of its upcoming meeting.
U.S. stocks jumps
U.S. stocks were trading in mixed fashion as investors weighed the prospect of lower U.S. interest rates against growing concerns over a cooling labor market ahead of the release of key inflation data.
At 4:00 p.m. ET (20:00 GMT), the Dow Jones Industrial Average rose 114 points, or 0.3%, while the S&P 500 gained 0.2% and the NASDAQ Composite climbed 0.5% closing at a record of 21,798.70.
The main averages on Wall Street retreated on Friday, following the release of a weaker-than-anticipated August nonfarm payrolls report which underlined an ongoing slowdown in the American labor market.
Still, the figures all but cemented expectations that the Fed will slash rates by at least 25 basis points at its September 16-17 policy gathering, and even bolstered the case for a half-point reduction from the current range of 4.25% to 4.5%.
Fed fund futures prices showed markets pricing in a roughly 90% chance the Fed will cut rates by 25 basis points next week, while also pricing in about a 10% probability for a 50-basis point cut, CME’s FedWatch Tool showed.
Crude gains after OPEC+ meeting
Oil prices surged higher after the OPEC+ production group agreed to raise output at a substantially smaller pace than that seen earlier this year.
At 12.05 ET, Brent futures gained 0,84% to $66.05 a barrel, and U.S. West Texas Intermediate crude futures rose 0.7% to $62.30 a barrel.
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, agreed on Sunday to raise production by a cumulative 137,000 barrels per day in October, much lower than monthly hikes of about 555,000 bpd and 411,000 bpd in earlier months.
OPEC+’s latest hike comes after it began steadily raising production earlier this year, as leader Saudi Arabia sought to regain market share to offset deteriorating oil prices.
Gold touches new all-time high
Gold prices surged to new record levels on Monday, as the soft U.S. jobs report strengthened expectations of a Fed rate cut.
Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold and also weaken the dollar, making the metal more appealing to foreign investors.
At 07:07 ET, spot gold rose 0.8% to $3,614.70 per ounce, climbing above Friday’s all-time peak of $3,600.03 per ounce, while gold futures for December were mostly unchanged at $3,655.00/oz.
Bullion prices jumped more than 4% last week and have gained for nine sessions out of the last ten. Year-to-date, gold has surged nearly 37% driven by safe-haven demand due to President Trump’s trade policies, and robust central bank demand -- especially from China.