By Ian Withers
LONDON (Reuters) – Gold prices just missed their record highs and crude oil prices were flat on Tuesday after surging last week as investors sought safety amid geopolitical risks and looked ahead to Nvidia earnings and U.S. inflation data later this week.
European shares were modestly higher at the open after Japan's Nikkei average surged late in the day. Global stock indexes were broadly little changed, with sentiment buoyed by better-than-expected profits from BHP, the world's biggest listed miner.
Gold remained above the $2,500 an ounce mark on views of an imminent U.S. interest rate cut and lingering concerns over the Middle East conflict, exacerbated by Sunday's massive missile attack between Israel and Hezbollah.
Oil prices have surged more than 7% over the past three sessions on Middle East tensions and concerns about a possible shutdown of Libyan oil fields, but the upward momentum faded on Tuesday, leading prices to edge lower. [O/R]
Expectations of faster interest rate cuts in the US are the main driver of market movements after Federal Reserve Chairman Jerome Powell said on Friday that the central bank is ready to start cutting interest rates.
“It would be a real shock if they didn't cut rates in September,” said Guy Miller, chief market strategist at Zurich Insurance Group Inc., adding that an initial 25 basis point cut was most likely.
“It was also interesting that the Governor did not push back much against market expectations of a 100 basis point or more cut between now and the end of the year,” Miller added.
The dollar index just missed a one-year low of 100.82, reflecting expectations of faster rate cuts, while the euro and pound approached their highest levels in months against the dollar. [FRX/]
A key measure of U.S. inflation due on Friday could further influence market perceptions of how quickly the Fed will act.
Investors were also nervous ahead of Nvidia's earnings report on Wednesday, as a failure by the chipmaker to deliver stellar forecasts could shake investor confidence in AI-driven stock growth.
“I think Nvidia [inflation data]” said Michaël Nizar, head of multi-asset at investment firm Edmond de Rothschild.
“We know inflation is on track. We don't know what the guidance is going to be for this big artificial intelligence company. This could be a shock to the market.”
MSCI Nationwide Stock Index <.miwd00000pus> It remained almost unchanged on the day at 830.17.
Also weighing on sentiment was Canada's decision to follow the United States and the European Union in imposing a 100% tariff on Chinese-made electric vehicle imports and a 25% tariff on steel and aluminum imports from China.
Oil prices took a breather, with Brent crude futures down 0.3% to $81.15 a barrel, while U.S. crude futures fell 0.5% to $77.01 a barrel.
(Reporting by Ian Withers in London; Additional reporting by Dhara Ranasinghe in London and Ankar Banerjee in Singapore; Editing by Shri Navaratnam, Jacqueline Wong and Christina Fincher)
