Markets Edge Higher as Traders Eye Fed Minutes and Gold Hits Record Highs
US stocks nudged higher on Wednesday as traders awaited the release of the Federal Reserve’s September meeting minutes, with investors hoping for clues on future interest rate moves amid a lingering US government shutdown. European markets, including the FTSE 100 (^FTSE), also climbed, shrugging off warnings from the International Monetary Fund (IMF) about a slowing US economy.
The Fed minutes, scheduled for 7pm UK time, are expected to provide insight into whether the US central bank may consider cutting rates later this year. With the government shutdown entering its eighth day, official economic data has been unavailable, leaving investors to rely on other indicators for guidance on the policy outlook.
IMF Urges US to Tackle Federal Deficit
IMF Managing Director Kristalina Georgieva stressed the importance of reducing the US federal deficit during a Milken Institute event. She highlighted that globally, countries need both private sector agility and robust government institutions to maintain a level playing field for economic growth.
Gold Surges Past $4,000 Amid Global Uncertainty
Meanwhile, gold extended its rally, breaking above $4,000 an ounce for the first time. Spot gold rose 1.4% to $4,058.90, marking another record high and a gain of over 50% year-to-date. Last year, gold climbed 27%, following a 13% rise the year before.
Gold’s appeal as a safe-haven asset and hedge against inflation has been reinforced by geopolitical tensions in France, Japan, and the US. Ewa Manthey, commodities strategist at ING, noted that gold has doubled in less than two years, supported by central bank buying, geopolitical risks, trade tensions, and rising ETF demand. “All of this suggests gold still has room to run,” she said.
The US remains the world’s largest gold holder with 8,133 tonnes, now valued at $1.04tn (£776bn)—the first time any nation’s reserves have surpassed the $1 trillion mark. India’s physically-backed gold ETFs also saw record inflows in September, pushing assets under management to $10bn (£7.5bn).
European Stocks Rebound
London’s FTSE 100 rose 0.7%, led by gains in banking and energy stocks. Germany’s DAX (^GDAXI) climbed roughly 1%, while Paris’ CAC 40 (^FCHI) surged 1.2%, rebounding from steep losses the previous day. French President Emmanuel Macron faces mounting pressure to resign or call snap elections following government instability.
US Stocks Show Modest Gains
In the US, the Dow Jones Industrial Average (^DJI) edged up 0.3%, recovering from a prior decline. The S&P 500 (^GSPC) gained 0.5% by the European close, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.8%.
Currency Moves
The pound dipped slightly, down 0.15% against the US dollar (GBPUSD=X) at 1.3409.
Key Takeaways for Traders
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Fed minutes are likely to guide expectations for US interest rates and market direction.
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Gold remains a strong safe-haven play amid geopolitical and economic uncertainty.
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European markets are rebounding, but political instability, particularly in France, could impact sentiment.
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Traders should monitor currency moves and risk appetite as the government shutdown continues.
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