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GLOBAL MARKETS-Gold hits 8-month high, stocks mixed amid trade caution, results

Published 2019-01-29, 04:32 p/m
© Reuters.  GLOBAL MARKETS-Gold hits 8-month high, stocks mixed amid trade caution, results
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* Gold breaks above $1,310

* Sterling slips after Brexit vote in Parliament

* Markets eye U.S.-China trade talks, Fed policy meeting

* Oil higher after U.S. imposes Venezuela sanctions

By Herbert Lash

NEW YORK, Jan 29 (Reuters) - Gold hit an eight-month high while world stock markets were mixed ahead of further U.S.-Sino trade talks, a raft of technology company results starting with Apple later on Tuesday and an impending Federal Reserve decision on U.S. interest rates.

The U.S. dollar traded little changed and oil prices rose after Washington slapped sanctions on Venezuela' state-owned oil firm in a bid to curb its crude exports as traders prepared for major events such as a key Brexit vote.

British lawmakers instructed Prime Minister Theresa May to demand that Brussels replace the Irish border arrangement known as the "backstop" in a last-ditch attempt to renegotiate an exit treaty that the European Union says it will not change. GBP= fell sharply after a brief rise, down 0.69 percent.

Investors expect the Fed, the U.S. central bank, to show a more cautious stance when policymakers release a statement on Wednesday after a two-day meeting. U.S. economic data in December that was softer than expected and a sharp downturn in financial markets are likely to keep the Fed from raising rates.

Equity markets in Europe rose as investors bid up stocks considered safer during times of economic uncertainty, such as utilities. However, a gauge of global stock performance edged lower as stocks on Wall Street fell amid a ream of mixed earnings reports and caution due to the U.S.-China trade spat.

MSCI's gauge of stocks across the globe .MIWD00000PUS was little changed, while the FTSEurofirst 300 index .FTEU3 of leading regional shares in Europe closed 0.8 percent higher.

The Dow Jones Industrial Average .DJI rose 51.74 points, or 0.21 percent, to 24,579.96. The S&P 500 .SPX lost 3.85 points, or 0.15 percent, to 2,640 and the Nasdaq Composite .IXIC dropped 57.40 points, or 0.81 percent, to 7,028.29.

The information glut this week will make it hard for people to reach a conclusion but the trade talks with China, which begin Wednesday, are the overriding issue for the world economy, said David Kelly, chief global strategist at JPMorgan (NYSE:JPM) Funds in New York.

What Washington, and possibly Beijing, fail to understand is that the uncertainty about trade is slowing the global economy, which will show up in East Asian PMI manufacturing data for January to be released on Thursday, Kelly said.

"The biggest tax levy by Washington is an uncertainty tax, and it's the biggest threat to the markets and the economy this year," Kelly said.

Tensions were high after U.S. officials announced criminal charges against China's telecom giant Huawei for violating U.S. sanctions against Iran. Asia, the blow was cushioned by promises of more Chinese stimulus but Beijing had berated Washington for blocking tactics in its World Trade Organization appeal against U.S. tariffs. the uncertainty, safe-haven gold XAU= broke through $1,310 an ounce in spot prices to reach its highest since last May. GOL/

U.S. gold futures GCcv1 settled up 0.4 percent at $1,308.90 per ounce.

Oil price gains were capped by abundant supply and signs of a slowing Chinese economy. Brent crude oil futures LCOc1 rose $1.39 to settle at $61.32 a barrel while U.S. West Texas Intermediate (WTI) crude futures CLc1 gained $1.32 to settle at $53.31.

Market participants will have catalysts for trading all week, with more than one-fifth of companies on the benchmark S&P 500 index reporting results, including Amazon AMZN.O , Microsoft MSFT.O and Facebook FB.O .

Apple AAPL.O , which issued a profit warning this month due to weak demand from China, is due to report after the market closes. .N

U.S. Treasury yields fell across maturities as investors anticipated strong demand for $78 billion of new issues on sale later in the day and on data showing U.S. consumer confidence at its lowest since July 2017. 10-year U.S. Treasury notes US10YT=RR rose 9/32 in price to push their yield down to 2.7116 percent.

The dollar index .DXY rose 0.06 percent, while the euro EUR= gained 0.01 percent to $1.1434. The Japanese yen JPY= weakened 0.01 percent versus the greenback at 109.33 per dollar.

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