Global stocks dropped sharply on Friday with richly-valued tech firms taking much of the pain, as a US&nbsp;jobs&nbsp;report flagging unexpected economic weakness struck fear in markets already rattled by downbeat earnings updates from Amazon and Intel.

With thin summer trading likely exaggerating moves, a slump that began in Asia with a 5.8% drop for Japan's Nikkei, its biggest daily fall since March 2020 during the COVID-19 crisis, rippled through Europe and headed for Wall Street.

MSCI's global stock gauge dropped 0.8%, European shares fell 2%, the VIX stock market volatility measure, dubbed Wall Street's fear gauge, hit its highest since April and money poured into government bonds.

Friday's sell-down followed a softer-than-expected US&nbsp;factory activity survey and the monthly US&nbsp;non-farm payrolls report, which showed job growth slumped to 114,000 new hires in July from 179,000 in June.

Futures trading implied the US&nbsp;S&amp;P 500 share index would soon open 1.8% lower and the tech-heavy Nasdaq 100 would fall to at least 10% below its recent peak, the accepted definition of a stock market correction.

Also Read |&nbsp;<a href="https://www.wionews.com/business-economy/intel-to-fire-over-17000-employees-suspend-dividend-as-growth-stalls-746491">Intel to fire over 17,000 employees, suspend dividend as growth stalls</a>

The US&nbsp;Federal Reserve has kept benchmark borrowing costs at a 23-year high of 5.25%-5.50% for a year, and some analysts believe the world's most influential central bank may have kept monetary policy tight for too long, risking a recession.

"The historical experience is that turnarounds in the labour market can occur quickly and brutally and that relatively moderate increases in unemployment have been enough to trigger recessions in the United States," SEB&nbsp;US&nbsp;economist Elisabet Kopelman said.

<h2>Trimming big tech positions</h2>

Money markets on Friday rushed to price a 70% chance of the Fed, which was already widely expected to cut rates from September, implementing a jumbo 50 basis points cut next month to insure against a downturn.

"That does feel like we have jumped the gun," Fidelity International fixed income manager Shamil Gohil said.

He added, however, that "we will also be watching for a rise in the unemployment rate which will give&nbsp;us&nbsp;clues about a weaker labour market and as a potential recessionary signal."

Shares in US&nbsp;chipmaker Intel tumbled more than 20% in pre-market trading on Friday after the group suspended its dividend and announced hefty job cuts alongside underwhelming earnings forecasts.

Artificial intelligence chipmaker Nvidia, one of the biggest contributors to the tech rally, dropped 4.1% pre-market and European tech stocks swooned 4.6% lower.

Nvidia, up more than 700% since January 2023, has left many asset managers with an outsized exposure to the fortunes of this single stock.

Steven Bell, chief economist for EMEA at asset manager Columbia Threadneedle, said that, while investors were trimming big tech positions to rebalance their portfolios, the US&nbsp;economy was not about to contract.

"Personally, I'm not thinking I should run for the hills," he said. "This is a slowdown, not a recession. And the background of lower interest rates, lower inflation and real wages rising because inflation is falling faster than wage growth, all of that's quite positive."

<h2>Buying safe havens</h2>

Safe-haven buying went full throttle on Friday, however, with government debt, gold, and currencies traditionally viewed as likely to hold value during market chaos all rallying.

The 10-year Treasury yield collapsed by 16 bps to 3.796%, putting the benchmark debt security on track for its best weekly rally since March 2020. Bond yields fall as prices of the securities rise.

The two-year yield, which typically reflects near-term interest rate expectations, dropped by a stunning 25 basis points to 3.9208%.

The 10-year German bund yield, a benchmark for euro zone debt costs, hit its lowest since March 2023, at 2.201%.

Also Read |&nbsp;<a href="https://www.wionews.com/business-economy/money-wise-ola-electric-rides-ipo-market-heres-everything-you-need-to-know-before-investing-746495">Money-Wise: Ola Electric rides IPO market. Here's everything you need to know before investing</a>

In foreign exchange markets, the yen added 0.2% to 149.04 per dollar to extend a rapid bounce back for the weakened currency, given some relief this week by the Bank of Japan raising interest rates to levels unseen in 15 years.

Switzerland's franc touched its highest since early February, at 0.08698 per dollar, before settling back slightly to 0.871.

Sterling was on track for a 1% weekly drop against the dollar as traders speculated that the Bank of England would follow its first rate cut of this cycle on Thursday with another in November.

Commodity markets broadly displayed global growth fears as gold added 1.3% to $2,473 an ounce and Brent crude oil dropped 1.4% $78.11 a barrel, headed for a fourth successive weekly loss.

Disclaimer: This story has been published from a news agency feed with minimal edits to adhere to WION's style guide. The headline may have been changed to better reflect the content of the story or to make it more suitable for WION&nbsp;audience. 
&nbsp;

Global stocks dropped sharply on Friday with richly-valued tech firms taking much of the pain, as a US jobs report flagging unexpected economic weakness struck fear in markets already rattled by downbeat earnings updates from Amazon and Intel.

Global stocks dropped sharply on Friday with richly-valued tech firms taking much of the pain, as a US jobs report flagging unexpected economic weakness struck fear in markets already rattled by downbeat earnings updates from Amazon and Intel. With thin summer trading likely exaggerating moves, a slump that began in Asia with a 5.8% drop for Japan's Nikkei, its biggest daily fall since March 2020 during the COVID-19 crisis, rippled through Europe and headed for Wall Street. MSCI's global stock gauge dropped 0.8%, European shares fell 2%, the VIX stock market volatility measure, dubbed Wall Street's fear gauge, hit its highest since April and money poured into government bonds. Friday's sell-down followed a softer-than-expected US factory activity survey and the monthly US non-farm payrolls report, which showed job growth slumped to 114,000 new hires in July from 179,000 in June. Futures trading implied the US S&P 500 share index would soon open 1.8% lower and the tech-heavy Nasdaq 100 would fall to at least 10% below its recent peak, the accepted definition of a stock market correction. Also Read | Intel to fire over 17,000 employees, suspend dividend as growth stalls The US Federal Reserve has kept benchmark borrowing costs at a 23-year high of 5.25%-5.50% for a year, and some analysts believe the world's most influential central bank may have kept monetary policy tight for too long, risking a recession. "The historical experience is that turnarounds in the labour market can occur quickly and brutally and that relatively moderate increases in unemployment have been enough to trigger recessions in the United States," SEB US economist Elisabet Kopelman said. Trimming big tech positions Money markets on Friday rushed to price a 70% chance of the Fed, which was already widely expected to cut rates from September, implementing a jumbo 50 basis points cut next month to insure against a downturn. "That does feel like we have jumped the gun," Fidelity International fixed income manager Shamil Gohil said. He added, however, that "we will also be watching for a rise in the unemployment rate which will give us clues about a weaker labour market and as a potential recessionary signal." Shares in US chipmaker Intel tumbled more than 20% in pre-market trading on Friday after the group suspended its dividend and announced hefty job cuts alongside underwhelming earnings forecasts. Artificial intelligence chipmaker Nvidia, one of the biggest contributors to the tech rally, dropped 4.1% pre-market and European tech stocks swooned 4.6% lower. Nvidia, up more than 700% since January 2023, has left many asset managers with an outsized exposure to the fortunes of this single stock. Steven Bell, chief economist for EMEA at asset manager Columbia Threadneedle, said that, while investors were trimming big tech positions to rebalance their portfolios, the US economy was not about to contract. "Personally, I'm not thinking I should run for the hills," he said. "This is a slowdown, not a recession. And the background of lower interest rates, lower inflation and real wages rising because inflation is falling faster than wage growth, all of that's quite positive." Buying safe havens Safe-haven buying went full throttle on Friday, however, with government debt, gold, and currencies traditionally viewed as likely to hold value during market chaos all rallying. The 10-year Treasury yield collapsed by 16 bps to 3.796%, putting the benchmark debt security on track for its best weekly rally since March 2020. Bond yields fall as prices of the securities rise. The two-year yield, which typically reflects near-term interest rate expectations, dropped by a stunning 25 basis points to 3.9208%. The 10-year German bund yield, a benchmark for euro zone debt costs, hit its lowest since March 2023, at 2.201%. Also Read | Money-Wise: Ola Electric rides IPO market. Here's everything you need to know before investing In foreign exchange markets, the yen added 0.2% to 149.04 per dollar to extend a rapid bounce back for the weakened currency, given some relief this week by the Bank of Japan raising interest rates to levels unseen in 15 years. Switzerland's franc touched its highest since early February, at 0.08698 per dollar, before settling back slightly to 0.871. Sterling was on track for a 1% weekly drop against the dollar as traders speculated that the Bank of England would follow its first rate cut of this cycle on Thursday with another in November. Commodity markets broadly displayed global growth fears as gold added 1.3% to $2,473 an ounce and Brent crude oil dropped 1.4% $78.11 a barrel, headed for a fourth successive weekly loss. Disclaimer: This story has been published from a news agency feed with minimal edits to adhere to WION's style guide. The headline may have been changed to better reflect the content of the story or to make it more suitable for WION audience.

Fears for US economy drive tech-led global stock slump

The federal reserve should begin experimenting with a virtual currency.

When was the last time you made a payment with dollar bills?

Some people still prefer to use cash, perhaps because they like the tactile nature of physical currency or because it provides confidentiality in transactions. But digital payments, made with the swipe of a card or a few taps on a cellphone, are fast&nbsp;becoming the norm.

To keep their money relevant, many central banks are experimenting with digital versions of their currencies. These currencies are virtual, like Bitcoin; but unlike Bitcoin, which is a private enterprise, they are issued by the state and function much like traditional currencies. The idea is for central banks to introduce these digital currencies in limited circulation — to exist alongside cash as just another monetary option — and then to broaden their circulation over time, as they gain in popularity and cash fades away.

Also read |&nbsp;<a href="https://www.wionews.com/opinions-blogs/the-race-for-national-digital-currency-is-gaining-momentum-is-india-lagging-behind-299893">The race for national digital currency is gaining momentum, is India lagging behind?</a>

China,&nbsp;Japan&nbsp;and&nbsp;Sweden&nbsp;have begun trials of central bank digital currency. The&nbsp;Bank of England&nbsp;and the&nbsp;European Central Bank&nbsp;are preparing their own trials.&nbsp;The Bahamas&nbsp;has already rolled out the world’s first official digital currency.

The US&nbsp;Federal Reserve, by contrast, has largely stayed on the sidelines. This could be a lost opportunity. The United States should develop a digital dollar, not because of what other countries are doing, but because the benefits of a digital currency far outweigh the costs.

One benefit is security. Cash is vulnerable to loss and theft, a problem for both individuals and businesses, whereas digital currencies are relatively secure. Electronic hacking does pose a risk, but one that can be managed with new technologies. (As it happens, offshoots of Bitcoin’s technology&nbsp;could prove helpful&nbsp;in increasing security.)

Also read |&nbsp;<a href="https://www.wionews.com/world/crypto-mining-how-does-digital-currency-manufacturing-affect-environment-393162">Crypto mining: How does digital currency manufacturing affect environment?</a>

Digital currencies also benefit the poor and “unbanked.” It is hard to get a credit card if you don’t have much money, and banks charge fees for low-balance accounts that can make them prohibitively expensive. But a digital dollar would give everyone, including the poor, access to a digital payment system and a portal for basic banking services. Each individual or household could have a fee-free, noninterest-bearing account with the Federal Reserve, linked to a cellphone app for making payments. (About 97 percent of American adults&nbsp;have a cellphone or smartphone.)

To see how this might help, consider the payments that the US&nbsp;government made to households as part of the coronavirus stimulus packages. Millions of low-income households without bank accounts or direct deposit information on file with the Internal Revenue Service&nbsp;experienced complications or delays&nbsp;in getting those payments. Checks and debit cards mailed to many of them were delayed or lost, and&nbsp;scammers&nbsp;found ways to intercept payments. Central-bank accounts could have reduced fraud and made administering stimulus payments easier, faster and more secure.

A central-bank digital currency can also be a useful policy tool. Typically, if the Federal Reserve wants to stimulate consumption and investment, it can cut interest rates and make cheap credit available. But if the economy is cratering and the Fed has already cut the short-term interest rate it controls to near zero, its options are limited. If cash were replaced with a digital dollar, however, the Fed could impose a negative interest rate by gradually shrinking the electronic balances in everyone’s digital currency accounts, creating an incentive for consumers to spend and for companies to invest.

Also read |&nbsp;<a href="https://www.wionews.com/world/chinese-banks-promoting-digital-currency-posing-threat-to-alipay-wechat-duopoly-380452">Chinese banks promoting digital currency, posing threat to Alipay, WeChat duopoly</a>

A digital dollar would also hinder illegal activities that rely on anonymous cash transactions, such as drug dealing, money laundering and terrorism financing. It would bring “off the books” economic activity out of the shadows and into the formal economy, increasing tax revenues. Small businesses would benefit from lower transaction costs, since people would use credit cards less often, and they would avoid the hassles of handling cash.

To be sure, there are potential risks to central-bank digital currencies, and any responsible plan should prepare for them. For example, a digital dollar would pose a danger to the banking system. What if households were to move their money out of regular bank accounts and into central-bank accounts, perceiving them as safer, even if they pay no interest? The central bank could find itself in the undesirable position of having to allocate credit, deciding which sectors and businesses deserve loans.

But this risk can be managed. Commercial banks could vet customers and maintain the central-bank digital currency accounts along with their own interest-bearing deposit accounts. The digital currency accounts might not directly help banks earn profits, but they would attract customers who could then be offered savings or loan products. (To help protect commercial banks, limits can also be placed on the amount of money stored in central-bank accounts,&nbsp;as the Bahamas has done.) A central bank digital currency could be designed for use across different payment platforms, promoting private-sector competition and encouraging innovations that make electronic payments cheaper, quicker and more secure.

Also read |&nbsp;<a href="https://www.wionews.com/science-tech/digital-currency-bitcoin-hits-record-high-now-valued-over-1700-15423">Digital currency Bitcoin hits record high; now valued over $1700</a>

Another concern is the&nbsp;loss of privacy&nbsp;that central-bank digital currencies entail. Even with protections in place to ensure confidentiality, no central bank would forgo the ability to audit and trace transactions. A digital dollar could threaten what remains of anonymity and privacy in commercial transactions — a reminder that adopting a digital dollar is not just an economic but also a social decision.

The end of cash is on the horizon, and it will have far-reaching effects on the economy, finance and society more broadly. With proper preparation and open discussion, we should embrace the advent of a digital dollar.

The federal reserve should begin experimenting with a virtual currency. When was the last time you made a payment with dollar bills? Some people still prefer to use cash, perhaps because they like the tactile nature of physical currency or because it provides confidentiality in transactions.

The federal reserve should begin experimenting with a virtual currency. When was the last time you made a payment with dollar bills? Some people still prefer to use cash, perhaps because they like the tactile nature of physical currency or because it provides confidentiality in transactions. But digital payments, made with the swipe of a card or a few taps on a cellphone, are fast becoming the norm. To keep their money relevant, many central banks are experimenting with digital versions of their currencies. These currencies are virtual, like Bitcoin; but unlike Bitcoin, which is a private enterprise, they are issued by the state and function much like traditional currencies. The idea is for central banks to introduce these digital currencies in limited circulation — to exist alongside cash as just another monetary option — and then to broaden their circulation over time, as they gain in popularity and cash fades away. Also read | The race for national digital currency is gaining momentum, is India lagging behind? China, Japan and Sweden have begun trials of central bank digital currency. The Bank of England and the European Central Bank are preparing their own trials. The Bahamas has already rolled out the world’s first official digital currency. The US Federal Reserve, by contrast, has largely stayed on the sidelines. This could be a lost opportunity. The United States should develop a digital dollar, not because of what other countries are doing, but because the benefits of a digital currency far outweigh the costs. One benefit is security. Cash is vulnerable to loss and theft, a problem for both individuals and businesses, whereas digital currencies are relatively secure. Electronic hacking does pose a risk, but one that can be managed with new technologies. (As it happens, offshoots of Bitcoin’s technology could prove helpful in increasing security.) Also read | Crypto mining: How does digital currency manufacturing affect environment? Digital currencies also benefit the poor and “unbanked.” It is hard to get a credit card if you don’t have much money, and banks charge fees for low-balance accounts that can make them prohibitively expensive. But a digital dollar would give everyone, including the poor, access to a digital payment system and a portal for basic banking services. Each individual or household could have a fee-free, noninterest-bearing account with the Federal Reserve, linked to a cellphone app for making payments. (About 97 percent of American adults have a cellphone or smartphone.) To see how this might help, consider the payments that the US government made to households as part of the coronavirus stimulus packages. Millions of low-income households without bank accounts or direct deposit information on file with the Internal Revenue Service experienced complications or delays in getting those payments. Checks and debit cards mailed to many of them were delayed or lost, and scammers found ways to intercept payments. Central-bank accounts could have reduced fraud and made administering stimulus payments easier, faster and more secure. A central-bank digital currency can also be a useful policy tool. Typically, if the Federal Reserve wants to stimulate consumption and investment, it can cut interest rates and make cheap credit available. But if the economy is cratering and the Fed has already cut the short-term interest rate it controls to near zero, its options are limited. If cash were replaced with a digital dollar, however, the Fed could impose a negative interest rate by gradually shrinking the electronic balances in everyone’s digital currency accounts, creating an incentive for consumers to spend and for companies to invest. Also read | Chinese banks promoting digital currency, posing threat to Alipay, WeChat duopoly A digital dollar would also hinder illegal activities that rely on anonymous cash transactions, such as drug dealing, money laundering and terrorism financing. It would bring “off the books” economic activity out of the shadows and into the formal economy, increasing tax revenues. Small businesses would benefit from lower transaction costs, since people would use credit cards less often, and they would avoid the hassles of handling cash. To be sure, there are potential risks to central-bank digital currencies, and any responsible plan should prepare for them. For example, a digital dollar would pose a danger to the banking system. What if households were to move their money out of regular bank accounts and into central-bank accounts, perceiving them as safer, even if they pay no interest? The central bank could find itself in the undesirable position of having to allocate credit, deciding which sectors and businesses deserve loans. But this risk can be managed. Commercial banks could vet customers and maintain the central-bank digital currency accounts along with their own interest-bearing deposit accounts. The digital currency accounts might not directly help banks earn profits, but they would attract customers who could then be offered savings or loan products. (To help protect commercial banks, limits can also be placed on the amount of money stored in central-bank accounts, as the Bahamas has done.) A central bank digital currency could be designed for use across different payment platforms, promoting private-sector competition and encouraging innovations that make electronic payments cheaper, quicker and more secure. Also read | Digital currency Bitcoin hits record high; now valued over $1700 Another concern is the loss of privacy that central-bank digital currencies entail. Even with protections in place to ensure confidentiality, no central bank would forgo the ability to audit and trace transactions. A digital dollar could threaten what remains of anonymity and privacy in commercial transactions — a reminder that adopting a digital dollar is not just an economic but also a social decision. The end of cash is on the horizon, and it will have far-reaching effects on the economy, finance and society more broadly. With proper preparation and open discussion, we should embrace the advent of a digital dollar.

Cash will soon be obsolete. Will America be ready?

Shares edged lower on Wednesday as an emergency 50 basis point rate cut by the US&nbsp;Federal Reserve failed to calm investor nerves about the debilitating impact of the coronavirus outbreak.

The surprise rate cut on Tuesday was accompanied by Fed Chairman Jerome Powell's acknowledgement of an uncertain outlook and his view that rate cuts will not restore supply chains, sending US&nbsp;stocks sharply lower overnight and gold higher.

Also read:&nbsp;<a href="https://www.wionews.com/world/federal-reserve-must-further-ease-rates-we-are-not-playing-on-a-level-field-284049">Federal Reserve must further ease rates, we are not playing on a level field</a>

Indian equities, which had rallied on Tuesday on hopes of a coordinated effort by major central banks to combat the economic fallout of the virus, were kept in check on Wednesday by losses in heavyweight financials.

"Markets are uneasy as the Fed's action has shown the gravity of the situation and Powell's comments have indicated that the cut alone will not solve the problem," said Saurabh Jain, assistant vice president research, SMC Global Securities.

The NSE Nifty 50 index fell 0.25&nbsp;per cent&nbsp;to 11,276 by 0358 GMT, while the benchmark S&amp;P BSE Sensex was down 0.26 per cent&nbsp;at 38,523.66.

Also read:&nbsp;<a href="https://www.wionews.com/business-economy/world-bank-announces-up-to-12-billion-in-immediate-funds-for-coronavirus-284072">World Bank announces up to $12 billion in immediate funds for coronavirus</a>

"From the monetary policy angle, ensuring adequate availability of liquidity for stressed sectors is more important than rate cuts. And of course, fiscal measures too could be useful at this juncture," said Kunal Kundu, India economist with Societe Generale.

However, analysts said investors were still expecting the Reserve Bank of India (RBI) to reduce rates as well, in line with global counterparts.

The RBI said on Tuesday it stood ready to take appropriate actions to ensure the functioning of financial markets and preserve financial stability. 
Top private-sector lender HDFC Bank Ltd was the biggest drag on the indexes, falling as much as 1.1 per cent.

Vedanta Ltd dropped 3.7&nbsp;per cent&nbsp;and was the biggest loser on the blue-chip Nifty index. The Nifty Metal Index slipped 2 per cent.

Defence firm Hindustan Aeronautics Ltd fell as much as 5.1 per cent&nbsp;to its lowest since Sept. 4 after the company said it got a notice from the International Court of Arbitration related to an alleged breach of agreement with RUAG Aerospace Services GMBH.

Shares edged lower on Wednesday as an emergency 50 basis point rate cut by the US Federal Reserve failed to calm investor nerves about the debilitating impact of the coronavirus outbreak.

Shares edged lower on Wednesday as an emergency 50 basis point rate cut by the US Federal Reserve failed to calm investor nerves about the debilitating impact of the coronavirus outbreak. The surprise rate cut on Tuesday was accompanied by Fed Chairman Jerome Powell's acknowledgement of an uncertain outlook and his view that rate cuts will not restore supply chains, sending US stocks sharply lower overnight and gold higher. Also read: Federal Reserve must further ease rates, we are not playing on a level field Indian equities, which had rallied on Tuesday on hopes of a coordinated effort by major central banks to combat the economic fallout of the virus, were kept in check on Wednesday by losses in heavyweight financials. "Markets are uneasy as the Fed's action has shown the gravity of the situation and Powell's comments have indicated that the cut alone will not solve the problem," said Saurabh Jain, assistant vice president research, SMC Global Securities. The NSE Nifty 50 index fell 0.25 per cent to 11,276 by 0358 GMT, while the benchmark S&P BSE Sensex was down 0.26 per cent at 38,523.66. Also read: World Bank announces up to $12 billion in immediate funds for coronavirus "From the monetary policy angle, ensuring adequate availability of liquidity for stressed sectors is more important than rate cuts. And of course, fiscal measures too could be useful at this juncture," said Kunal Kundu, India economist with Societe Generale. However, analysts said investors were still expecting the Reserve Bank of India (RBI) to reduce rates as well, in line with global counterparts. The RBI said on Tuesday it stood ready to take appropriate actions to ensure the functioning of financial markets and preserve financial stability. Top private-sector lender HDFC Bank Ltd was the biggest drag on the indexes, falling as much as 1.1 per cent. Vedanta Ltd dropped 3.7 per cent and was the biggest loser on the blue-chip Nifty index. The Nifty Metal Index slipped 2 per cent. Defence firm Hindustan Aeronautics Ltd fell as much as 5.1 per cent to its lowest since Sept. 4 after the company said it got a notice from the International Court of Arbitration related to an alleged breach of agreement with RUAG Aerospace Services GMBH.

Nifty, Sensex slip as Fed rate cut fails to boost confidence

Gold prices hit a six-month high on Wednesday as concerns over global growth and a partial government shutdown in the United States fuelled risk aversion, prompting investors to seek refuge in the metal.

Spot gold climbed 0.3 per cent to $1,271.85 per ounce as at 0429 GMT. The metal hit $1272.56 in early trade, its highest since June 20.

US&nbsp;gold futures were up 0.3 per cent at $1,275.8 per ounce.

Investors are uneasy about global economic growth and are seeking gold as a safe-haven, said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank, adding the sharp sell-off in stock markets has also lent support.

"We always see good demand for gold in the year-end. I would not be surprised if we see gold surpass $1,300 in the near future."

Asian equities were shaky following a Christmas eve US&nbsp;stocks plunge. Wall Street has dropped sharply in recent weeks on concerns over weaker economic growth, compounded by political instability in the United States after a partial government shutdown.

The US&nbsp;Senate has been unable to break an impasse over&nbsp;Trump's demand for more funds for a wall on the border with Mexico, and a senior official said the shutdown could continue until January 3.

Tensions between the White House and the US&nbsp;Federal Reserve over monetary policy tightening also weighed on sentiment in the wider markets.

President Donald&nbsp;Trump&nbsp;largely laid the blame for economic headwinds on the Fed, openly criticizing its chairman, Jerome Powell, whom he appointed.

"The latest move on gold should be a stark reminder to investors that gold in any form should be an essential part of any long-term investment strategy as again they yellow metal has proven its weight when markets turn turbulent," Stephen Innes, APAC trading head at OANDA in Singapore, said in a note.

Among other metals, silver rose 0.5 per cent to $14.80 per ounce, while platinum rose 0.3 per cent to $784.50.

Palladium was up 0.5 per cent to $1,252.24 per ounce.

Gold prices hit a six-month high on Wednesday as concerns over global growth and a partial government shutdown in the United States fuelled risk aversion, prompting investors to seek refuge in the metal.

Gold prices hit a six-month high on Wednesday as concerns over global growth and a partial government shutdown in the United States fuelled risk aversion, prompting investors to seek refuge in the metal. Spot gold climbed 0.3 per cent to $1,271.85 per ounce as at 0429 GMT. The metal hit $1272.56 in early trade, its highest since June 20. US gold futures were up 0.3 per cent at $1,275.8 per ounce. Investors are uneasy about global economic growth and are seeking gold as a safe-haven, said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank, adding the sharp sell-off in stock markets has also lent support. "We always see good demand for gold in the year-end. I would not be surprised if we see gold surpass $1,300 in the near future." Asian equities were shaky following a Christmas eve US stocks plunge. Wall Street has dropped sharply in recent weeks on concerns over weaker economic growth, compounded by political instability in the United States after a partial government shutdown. The US Senate has been unable to break an impasse over Trump's demand for more funds for a wall on the border with Mexico, and a senior official said the shutdown could continue until January 3. Tensions between the White House and the US Federal Reserve over monetary policy tightening also weighed on sentiment in the wider markets. President Donald Trump largely laid the blame for economic headwinds on the Fed, openly criticizing its chairman, Jerome Powell, whom he appointed. "The latest move on gold should be a stark reminder to investors that gold in any form should be an essential part of any long-term investment strategy as again they yellow metal has proven its weight when markets turn turbulent," Stephen Innes, APAC trading head at OANDA in Singapore, said in a note. Among other metals, silver rose 0.5 per cent to $14.80 per ounce, while platinum rose 0.3 per cent to $784.50. Palladium was up 0.5 per cent to $1,252.24 per ounce.

Gold climbs to six-month peak on waning risk appetite

Gold prices nudged down early Wednesday on a firmer dollar, as investors waited for details of the US&nbsp;Federal Reserve's two-day meeting that should give clues whether policymakers will raise interest rates for the third time this year.

FUNDAMENTALS

** Spot gold &lt;XAU=&gt; was down 0.1 per cent at $1,200.18, as of 0057 GMT.

** US gold futures &lt;GCcv1&gt; little changed at $1,204.6 an ounce.

** Investors await details from the two-day Federal Reserve meeting that began on Tuesday, with the US central bank expected to raise benchmark interest rates and shed light on the path for future rate hikes.

** Higher US interest rates typically pressure gold, since it costs to store and insure, but does not pay interest.

** US consumer confidence surged to an 18-year high in September as households grew more upbeat about the labour market, pointing to sustained strength in the economy despite an increasingly bitter trade dispute between the United States and China.

** US President Donald Trump's top trade official said on Tuesday that changing China's economic policies to become more market-oriented "is not going to be easy" even with tariffs now in place on $250 billion worth of Chinese goods.

** Although gold is generally considered to be a safe-haven asset, the months-long trade rift between Washington and Beijing has instead prompted investors to buy US dollars in the belief that the United States has less to lose from the dispute.

** The dollar index &lt;.DXY&gt;, which weighs the greenback against a basket of six major currencies, was up 0.1 per cent.&nbsp;

** Canada is not making concessions needed to reach a deal with the United States for a trilateral NAFTA pact and is running out of time before Washington proceeds with a Mexico-only agreement, a top US official said on Tuesday.

** Donald Trump and Iranian President Hassan Rouhani exchanged taunts at the United Nations General Assembly on Tuesday with the US President vowing more sanctions against Tehran and Rouhani suggesting his American counterpart suffers from a "weakness of intellect."

** Money markets now anticipate the ECB will lift interest rates in September 2019, bringing forward expectations for a first rate hike in a sign of growing conviction that a move will come before Mario Draghi's term as ECB chief ends.

Gold prices nudged down early Wednesday on a firmer dollar, as investors waited for details of the US Federal Reserve's two-day meeting that should give clues whether policymakers will raise interest rates for the third time this year.

Gold prices nudged down early Wednesday on a firmer dollar, as investors waited for details of the US Federal Reserve's two-day meeting that should give clues whether policymakers will raise interest rates for the third time this year. FUNDAMENTALS ** Spot gold <XAU=> was down 0.1 per cent at $1,200.18, as of 0057 GMT. ** US gold futures <GCcv1> little changed at $1,204.6 an ounce. ** Investors await details from the two-day Federal Reserve meeting that began on Tuesday, with the US central bank expected to raise benchmark interest rates and shed light on the path for future rate hikes. ** Higher US interest rates typically pressure gold, since it costs to store and insure, but does not pay interest. ** US consumer confidence surged to an 18-year high in September as households grew more upbeat about the labour market, pointing to sustained strength in the economy despite an increasingly bitter trade dispute between the United States and China. ** US President Donald Trump's top trade official said on Tuesday that changing China's economic policies to become more market-oriented "is not going to be easy" even with tariffs now in place on $250 billion worth of Chinese goods. ** Although gold is generally considered to be a safe-haven asset, the months-long trade rift between Washington and Beijing has instead prompted investors to buy US dollars in the belief that the United States has less to lose from the dispute. ** The dollar index <.DXY>, which weighs the greenback against a basket of six major currencies, was up 0.1 per cent. ** Canada is not making concessions needed to reach a deal with the United States for a trilateral NAFTA pact and is running out of time before Washington proceeds with a Mexico-only agreement, a top US official said on Tuesday. ** Donald Trump and Iranian President Hassan Rouhani exchanged taunts at the United Nations General Assembly on Tuesday with the US President vowing more sanctions against Tehran and Rouhani suggesting his American counterpart suffers from a "weakness of intellect." ** Money markets now anticipate the ECB will lift interest rates in September 2019, bringing forward expectations for a first rate hike in a sign of growing conviction that a move will come before Mario Draghi's term as ECB chief ends.

Gold inches down as dollar firms; Fed in focus