NEW YORK: Gold prices rose and a gauge of global equity markets hit a record high on Thursday in light holiday trade as a year-end rally in stocks remained on course, with optimism over U.S.-China trade helping drive Wall Street to records.
Oil rose to three-month highs, buoyed by a report showing lower U.S. crude inventories, hopes the pending Sino-U.S. trade deal will soon be signed and efforts by the Organization of the Petroleum Exporting Countries to curb crude supply.
Boxing Day holidays closed markets in Commonwealth countries around the world while a second Christmas Day shuttered markets in a swath of European countries.
Overnight in Asia, equity markets rose, with China shares closing higher after Beijing laid out further plans to bolster its economy, including some US$385 billion in planned infrastructure investments.
MSCI's gauge of stocks across the globe gained 0.28per cent to a record high. Its broadest index of Asia-Pacific shares outside Japan closed up 0.15per cent, while Japan's Nikkei rose 0.60per cent.
Stocks on Wall Street rallied, with the benchmark S&P 500 and Nasdaq composite setting record intraday peaks. The S&P 500 is about 1 percentage point short of its best year since 1997.
Investors in major equity markets around the world have chalked up strong gains this year, marking a contrast to a plunge late last year, said Yousef Abbasi, global market strategist at INTL FCStone Financial Inc in New York.
"People are pretty happy with this year," he said.
Fourth-quarter earnings will soon come into focus in January, which should highlight whether sentiment among corporate management has improved, Abbasi said.
Recession fears scuttled capital expenditure plans during much of 2019 but strong employment and signs of an improving global economy suggests that will change next year.
The number of Americans filing applications for unemployment benefits fell last week in a sign of ongoing labor market strength.
Earlier, a spokesman for China's commerce ministry said Chinese and U.S. officials are in close touch and going through necessary procedures before signing a Phase 1 trade deal.
In late-morning trading the Dow Jones Industrial Average rose 72.9 points, or 0.26per cent, to 28,588.35. The S&P 500 gained 11.17 points, or 0.35per cent, to 3,234.55 and the Nasdaq Composite added 43.28 points, or 0.48per cent, to 8,996.16.
Spot gold rose 0.8per cent to US$1,509.88 an ounce.
Gold has been on the rise recently as a hedge against potential inflation, dollar weakness and increased equity market volatility in 2020, Abbasi said.
U.S. Treasury yields edged lower before the Treasury Department was to sell US$43 billion in seven-year notes, with volume light during a holiday-shortened week.
Benchmark 10-year notes fell 3/32 in price to yield 1.919per cent.
The auction comes after the U.S. government drew strong demand for a US$41 billion sale of five-year notes on Tuesday and slightly soft interest in a US$40 billion two-year note sale on Monday.
The dollar edged lower, while oil gained.
The dollar index fell 0.09per cent, with the euro up 0.09per cent to US$1.11. The Japanese yen weakened 0.30per cent versus the greenback at 109.68 per dollar.
The American Petroleum Institute, an oil industry group, said late on Tuesday that U.S. crude stocks fell by 7.9 million barrels last week, much more than the decline forecast by analysts.
Brent crude, the global benchmark, reached US$67.83 a barrel, the highest since Sept. 17, and was trading up 39 cents at US$67.59 a barrel. U.S. West Texas Intermediate crude gained 14 cents to US$61.25 a barrel.
(Reporting by Herbert Lash; Editing by Dan Grebler)