* Gold surges past key technical barrier of $2,000 an ounce
* Falling U.S. dollar, bond yields push gold higher
* Asian shares mostly lower on rising pandemic costs,
uncertainty
By Swati Pandey
SYDNEY, Aug 5 (Reuters) - Gold scaled a new high on
Wednesday as a weaker dollar and falling bond yields burnished
its safe-haven appeal, while shares were mostly lower as
investors baulked at the ballooning cost of the coronavirus
pandemic.
Risk assets such as equities have surged in recent months on
massive policy stimulus from central banks and governments, but
gold has also rallied in a sign of heightened uncertainty around
the long-term effects of the global health crisis.
Spot gold XAU= jumped to a record high of $2,030.72 per
ounce on Wednesday as bond yields hit new lows. Prices have
soared about 33% this year. GOL/
Investors are counting on even more spending in the United
States, with White House negotiators vowing to work "around the
clock" to reach a deal by the end of the week. Markets also latched on to comments from the president of
Federal Reserve Bank of San Francisco that the U.S. economy will
need more support than initially thought, sending long-term
Treasury yields into a downward spiral.
"Failure to agree to another round of stimulus would hit the
U.S. economy hard at a time when high-frequency data suggests it
is losing some momentum," said Tapas Strickland, analyst at
Melbourne-based National Australia Bank.
The United States has reported more than 4.7 million
coronavirus cases and over 157,000 deaths, the highest globally.
On Wednesday, MSCI's broadest index of Asia Pacific shares
outside of Japan .MIAPJ0000PUS was flat near a 6-1/2 month
peak at 560.36 points.
Japan's Nikkei was off 0.86% while Australia's benchmark
index .AXJO slipped 1%. Chinese shares fell too with the
blue-chip CSI300 index .CSI300 down 0.8%, though it was not
too far from a recent five-year peak.
South Korea's Kospi .KSII bucked the trend to hit its
highest level since October 2018.
E-Mini futures for the S&P 500 ESc1 was down 0.1%.
On Wall Street, the Dow .DJI ended up 0.6%, the S&P 500
.SPX rose 0.4% and the Nasdaq Composite .IXIC added 0.4%.
.N
"Significantly increased odds" of more monetary policy
stimulus from the U.S. Federal Reserve is a key driver of
equities although the rally has been reined in by stretched
valuations, Mizuho analysts wrote in a note.
More central bank support is also dragging U.S. Treasury
yields lower, led by the long-end of the curve, and helping
"fire-up gold's glitter", they added.
GREENBACK UNDER PRESSURE
The dollar was under pressure USD= with the safe-haven
Japanese yen JPY= rising to 105.66 as the bond market's dim
view of the U.S. recovery sent real yields further into negative
territory and nominal yields near record lows. US/
The risk-sensitive Australian dollar AUD=D3 has risen more
than 2% so far this year while the euro EUR= has climbed over
5% against the greenback.
The Aussie was last up 0.3% at $0.7184 while the common
currency was inching toward a two-year high at $1.1812,
buttressed by hardening perception that the U.S. rebound is
lagging Europe. FRX
Investors are now waiting for an Aug. 15 video conference
where senior U.S. and Chinese officials are set to review a
trade deal and likely air mutual grievances, according to
sources. China's U.S. envoy on Tuesday said Beijing does not want
tensions to escalate. In commodities, oil prices were a tad weaker with Brent
crude LCOc1 off 8 cents at $44.35 a barrel. U.S. crude CLc1
was down 11 cents at $41.59. O/R
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Tracking the spread of the novel coronavirus https://graphics.reuters.com/CHINA-HEALTH-MAP/0100B59S39E/index.html
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>