Gold prices crossed US$1,890 an ounce for the first time, as a flight to save-haven assets continued. Brent crude, meanwhile, fell to near US$107 a barrel as Libyan rebels’ capture of most of Tripoli boosted hopes the OPEC nation’s oil exports could resume soon. After rallying earlier in the day, European stocks erased much of their gains in late trading. Britain’s FTSE 100 closed one per cent higher at 5,092.8, after having risen above 2 per cent. France’s CAC 40 gained 1.1 per cent to 3,051.3, but Germany’s DAX declined 0.1 per cent to 5,473.7.
Wall Street, which opened firmly higher, also weakened in noon trading, with the Dow Jones Industrial Average up just 0.2 per cent at 10,835 and the S&P 500 down 0.2 per cent at 1121.8. The indecisive mood in Europe and the US followed a jittery day of trading in Asia, where most markets closed in the red.
Throughout the week, investors will be looking with anticipation to a speech Friday by US Federal Reserve Chairman Ben Bernanke. The Fed pledged earlier this month to keep interest rates super-low through mid-2013, but the announcement failed to calm fears that the world’s largest economy may once again fall into recession. Investors hope Bernanke will announce, or at least preview, further steps to help the economy, including a third round of bond purchases known as quantitative easing, but analysts warned against overly high expectations.
The European Central Bank yesterday confirmed that it was taking on a more active role in fighting the eurozone debt crisis, disclosing that it spent €14.29 billion on buying the bonds of struggling countries such as Italy and Spain last week. That’s below the €22 billion it doled out the previous week, but has kept the yields, or interest rates, on Italian and Spanish ten-year bonds below 5 per cent—more than a percentage point below record levels seen in the week before the ECB resumed its bond buying programme.