Washington, D.C., United States – Gold prices soared to a record high on Monday, driven by expectations of a Federal Reserve rate cut. This optimism was fueled by the appeal of gold as a safe-haven asset amidst uncertainties in the market. Spot gold saw a 1.32% increase, trading at $2,265.53 per ounce, while U.S. gold futures rose more than 2% to $2,286.39 per ounce. Joseph Cavatoni, Market Strategist at the World Gold Council, noted that market speculators are gaining confidence in the Fed cuts, driving the surge in gold prices.
The Nikkei 225 index in Japan fell 1.5% to trade below the 40,000 mark for the first time in 12 days. This decline followed the Bank of Japan’s decision to end its negative interest rates regime in mid-March. The Japanese yen traded at 151.29 against the U.S. dollar after hitting a 34-year low last week, contributing to the index’s drop. Business sentiment among large Japanese manufacturers also saw a slight decrease in the first quarter, according to the Bank of Japan’s Tankan survey, although optimism among non-manufacturers rose to its highest level since August 1991.
Rakuten Group in Japan confirmed that it is considering a reorganization of its financial technology businesses, leading to a 4% jump in the company’s shares. The firm indicated that it will make further announcements if necessary, following a report that revealed plans to merge its cards and securities units by October. In China, factory activity expanded at its fastest rate in 13 months, driven by increased inflows of new work, including from abroad, resulting in higher production levels and improved optimism among Chinese manufacturers.
On the other hand, South Korea’s factory activity slipped into contraction territory in March after two consecutive months of expansion. The country’s purchasing manager’s index dropped to 49.8 from 50.7 in February, with subdued demand and downgraded investment plans being cited as key factors. In contrast, Chinese factory activity expanded in March, surprising expectations and snapping a five-month streak in contraction territory. The official data revealed a manufacturing purchasing manager’s index of 50.8, highlighting positive growth in the sector.
In conclusion, while Japan’s manufacturing activity continued to contract for the 10th straight month in March, signs of improvement were noted, indicating a potential turnaround in the sector. These developments in key Asian economies highlight the complexities and challenges faced by various industries amidst global economic uncertainties.