Gold hits two-week high as dollar falls after G20 trade message

The tech-heavy US Nasdaq Composite index briefly bucked the trend and hit a record intraday peak of 5,915.120 before easing from that high.

Japan's Nikkei dropped 0.8 per cent, weighed by financial stocks, which were hurt by lower USA yields and exporter stocks, which fell on the yen's gains against the dollar.

Caution prevailed over USA and European stock markets after financial leaders of the world's biggest economies made only a token reference to trade on Saturday, acquiescing to an increasingly protectionist United States after a two-day G20 meeting failed to yield a compromise.

The uncertainty surrounding United States policy comes as investors are left waiting for some detail from Trump on his promise to ramp up infrastructure spending and slash taxes to fire up the economy. "That also means Japanese shares are unlikely to gain further", said Tatsushi Maeno, senior strategist at Okasan Asset Management.

The Fed lifted interest rates last week and said that its future course of hikes would be "gradual".

On Monday Chicago Fed President Charles Evans suggested there could be more hikes this year but Minneapolis boss Neel Kashkari said the policy board should take its time.

Evans, a voter on the Fed's policy-setting committee this year, repeated the central bank's call for two more interest rate increases this year, disappointing dollar bulls who had hoped for more a faster pace of hikes.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, rose 0.02% to 100.16 by 13:08 EDT.

His comments helped to bring down the 10-year U.S. Treasuries yield to 2.463 per cent, its lowest level in two weeks.

"There will be a lot of stop-loss selling if the dollar breaks under 112 yen", he added. The dollar didn't show much reaction, taking its cue instead from the moves in USA yields.

The South African rand has gained 4.0 per cent since then to a near 1-1/2-year high while the Brazilian real rose 3.2 per cent.

In commodities, oil prices continued their downward trend as OPEC supplies remained steady despite touted cuts, and rising US drilling contributed to concerns about a supply glut.

Hedge funds and money managers slashed their net long position in COMEX gold for the second straight week in the week to March 14, and also cut long positions in silver, U.S. Commodity Futures Trading Commission data showed on Friday.

USA crude futures traded at $48.30 per barrel in early Asian trade, up slightly from late US levels but down 1.1 per cent so far this week.

  • Zachary Reyes