An index of global stocks nestled near record highs on Friday while gold celebrated its biggest one-day rise in nine months as markets wagered monetary policy would stay super loose in the United States, Europe and Japan for a long time to come.
Investors had piled into bullion while selling U.S. government debt on the premise the Fed might be comfortable with higher inflation if it meant faster economic growth.
Spot gold was enjoying the view at $1,315.00 an ounce having been as far as $1,321.70 at one stage on Thursday when it climbed 3.3 percent.
Traders also said a major hedge fund had cut back a large short position in the precious metal which pushed prices above $1,300 an ounce and tripped a host of stop-loss buy orders.
Stocks were in demand with MSCI’s all-country world index, which includes about 85 percent of global investable equities, passing its previous all-time high set in November 2007.
Japan’s Nikkei ended steady after touching a fresh five-month peak, while the broader TOPIX brought its gains to more than 10 percent in just the past four weeks.
“The good mood is still lingering,” said Kyoya Okazawa, head of global equities at BNP Paribas. “Not just foreign investors but also long-term domestic investors like pension funds have been buying as well.”
MSCI’s broadest index of Asia-Pacific shares outside Japan ran out of steam, easing 0.4 percent on losses in South Korea and China.
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