The U.S. dollar slipped to a 14-month low on Tuesday, pushing gold to a record peak and helping lift oil to a seven-week high on worries that U.S. interest rates would remain at rock-bottom lows for some time.
Silver, platinum, palladium and rhodium also rallied to multimonth highs as the slumping dollar fueled a surge in precious metals. For more see [ID:nLD592188]
Spot gold XAU= scaled an all-time high of $1,068.30 an ounce, and oil reached a seven-week high of $74.47 a barrel.
An upward revision by the Organization of the Petroleum Exporting Countries to its demand forecast for 2010 also helped push oil prices above $74 a barrel along with the weak dollar. [ID:nSIN39761]
OPEC forecast a recovering global economy would boost worldwide demand for crude by 700,000 barrels a day next year, or 200,000 barrels more than it had previously forecast.
The euro climbed to near $1.49, its highest level since August 2008, while the dollar fell to lows last seen then against a basket of six major trading currencies .DXY.
Expectations of a stronger global recovery outside the United States added to rising demand for commodity-linked currencies such as the Canadian dollar and the Brazilian real.
The next icon to release results was Intel, the world's biggest chip-maker, which reported earnings after the close of regular U.S. stock market trading.
Index futures for all three major U.S. stock markets jumped after Intel's results beat Wall Street's expectations.
With the last two quarters characterized by cost-cutting and layoffs, investors have held out hope that companies begin to show third-quarter revenue growth or improved outlooks.
If the guidance is good, we can probably survive another anemic topline growth quarter from most of the major companies, said Alan Lancz, president of Alan B. Lancz & Associates Inc in Toledo, Ohio.
The Nasdaq eked out a gain after Cisco Systems Inc agreed to buy Starent Networks Corp for $2.9 billion, or $35 per share. [ID:nN13179321] Cisco shares rose 0.5 percent to $23.89.
The Dow Jones industrial average fell 14.74 points, or 0.15 percent, to close at 9,871.06. The Standard & Poor's 500 Index .SPX slipped 3.00 points, or 0.28 percent, to finish at 1,073.19. The Nasdaq Composite Index edged up 0.75 of a point, or 0.04 percent, to close at 2,139.89.
U.S. Treasury debt prices jumped, recovering from the worst sell-off in more than a month, as falling stocks and suggestions of a sluggish economic recovery revived a safety bid for bonds. [ID:nN13192884]
The benchmark 10-year U.S. Treasury note US10YT=RR shot up 9/32 in price to yield 3.35 percent.
The appetite for Treasuries and other low-risk assets re-emerged after a gauge of German investor morale unexpectedly fell in October, adding to recent data that has tempered hopes for a strong global recovery.
Gold held above $1,060 an ounce after setting a new record as fears lingered over the outlook for the U.S. currency.
Spot gold prices XAU= rose $7.35 to $1,062.60.
The trend in the dollar is lower, and that is going to be the main focus, said Tom Hartmann, a commodity analyst at California-based Altavest Worldwide Trading.
The outlook for the dollar will be predicated on the Fed, for one, hiking interest rates. But it doesn't look like that is going to happen any time soon, Hartmann said.
U.S. crude CLc1 rose 88 cents to settle at $74.15 a barrel. London Brent crude LCOc1 advanced $1.04 to settle at $72.40.
The dollar was down against a basket of major currencies, with the U.S. Dollar Index .DXY off 0.39 percent at 75.828.
The euro was up 0.37 percent at $1.4825, and against the yen, the dollar was down 0.13 percent at 89.71.
Overnight in Asia, Japan's Nikkei share average .N225 rose 0.6 percent, and MSCI's index of Asia Pacific shares outside Japan .MIAPJ0000PUS rose 0.4 percent.
(Reporting by Ryan Vlastelica, Steven C. Johnson, Richard Leong and Joshua Schneyer in New York; Atul Prakash, Harpreet Bhaland and Ian Chua in London; Writing by Herbert Lash; Editing by Jan Paschal)