Asian stocks trade mixed amid rally in gold prices

Asian stocks are struggling for direction, possibly due to caution ahead of next week's Fed meeting.
Gold is trading at the highest level since June 7.

Omkar Godbole FXStreet Contributor

Asian stocks are lacking a clear directional bias this Friday morning amid rally in gold – a classic safe haven asset.

As of writing, Japan’s Nikkei is up 0.27% at 21,079 and Australia’s S&P/ASX 200 is flat lined at 6,548.

Stocks in New Zealand, Hong Kong, and South Korea are flashing red. Meanwhile, the Shanghai Composite Index is currently trading at 2,906, representing 0.14% losses on the day.

The mixed action could be due to caution ahead of next week’s FOMC meeting. The markets have already priced for three rate cuts this year and hopes that the Fed would press the easing button to support the slowing domestic and global economy has boded well for the US stocks.

For instance, the S&P 500 is up 5% on a month-to-date basis.

The likes of Goldman Sachs, however, believe the markets have overpriced Fed rate cuts and the central bank will keep rates unchanged for the rest of the year.

While the Asian equities are largely dithering either side of the flat, gold is gaining altitude. The hard currency is currently trading at $1,348 per Oz, the highest since June 7, having charted a higher low at $1,320 earlier this week.

Further, the major European equity index futures are pointing to a flat open. Currently, the futures on Germany’s DAX and France’s CAC are trading largely unchanged on thee day. Meanwhile, UK’s FTSE is reporting a 0.20% gain at press time.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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