New York - A gauge of global shares rose to its highest in almost six years on Wednesday as bets lingered the Federal Reserve will remain supportive, while the US dollar edged lower giving further support to gold and copper prices.
Most traders expect the US central bank to signal later in the day it plans to keep in place a stimulus program that has lifted equities and other risk assets while weighing on the US currency and Treasury bond yields.
Spot gold rose the most in a week after soft US jobs data supported the view the Fed will keep its $85 billion a month in bond purchases in place, aiming to lift an economy that struggles to stand on its own.
US private-sector employers hired the fewest number of workers in six months in October while tepid domestic demand kept inflation benign last month, suggesting the economy was still in need of stimulus.
On Wall Street, the S&P 500 edged up to a fresh intraday record but indexes were mostly unchanged ahead of the Fed statement expected at 2 p.m. (1800 GMT).
Analysts, however, warned that any hint that the Fed could trim back stimulus in the near future would prompt a negative reaction, and noted that the recent rally had stretched valuations to a point that could encourage some profit-taking.
“The Fed is likely to continue to stimulate the economy into next year but since the market is overbought at this point, any surprise (...) could temporarily knock the wind out of this rally,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
The Dow Jones industrial average rose 7.58 points or 0.05 percent, to 15,687.93, the S&P 500 gained 0.37 points or 0.02 percent, to 1,772.32 and the Nasdaq Composite added 0.636 points or 0.02 percent, to 3,952.974.
Europe's broad FTSEurofirst 300 index reached its highest since mid-2008 with help from earnings including those from Volkswagen and retailer Next.
The MSCI world equity index hit an intraday level not seen since early 2008 and was last up 0.2 percent.
DOLLAR DIPS WHILE GOLD, COPPER JUMP
US private-sector employers added 130,000 jobs in October, below expectations for a rise of 150,000, data that hurt the US currency. The dollar dipped less than 0.1 percent against a basket of major currencies after gaining nearly 0.5 percent on Tuesday.
“The private sector jobs data reflects a labor market that shifted to lower gear in recent months and feeds into forecasts that the Fed will hold off on tapering until late in the first quarter of 2014,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington D.C.
Dollar sellers had driven the US currency to nine-month lows by the end of last week, taking their lead from a steady decline in US Treasury yields as investors anticipated and extended the period of Fed bond buying.
The 10-year Treasury note last traded up 5/32 in price with a yield of 2.4907 percent.
The euro edged up 0.1 percent to $1.3764 After dropping the most in three weeks on Tuesday.
Spot gold rose the most in a week also on expectations the Fed will keep buying bonds and pressuring the dollar. Gold was last up 0.8 percent near $1,355 an ounce.
Copper prices jumped 1.2 percent to $7,825 a ton.
Brent crude edged above $109 a barrel as export disruptions in Libya continue to cut supplies to Europe and Asia, while the benchmark US contract fell 1.2 percent to $97 a barrel after a bigger-than-expected increase in inventories in the United States. - Reuters