Gold jumped to a record high on Wednesday, pushing further past the $2,000 mark in the face of a weak dollar, falling US Treasury yields and expectations of more stimulus measures for the pandemic-ravaged global economy.
European stocks opened higher, aided by a batch of positive earnings. US equity futures rose too, indicating a firm open for Wall Street, while MSCI's broadest index of Asia Pacific shares outside of Japan rose 0.7 percent to a 6-1/2 month peak.
But it was the relentless rally in gold that held the spotlight as prices hit a fresh record high at around $2,039 per ounce.
The precious metal, which has soared more than 30 percent this year, is benefiting from heightened uncertainty around the long-term effects of the global health crisis.
Weakness in the dollar and falling US Treasury yields have encouraged investors to look for an alternative store of value-boosting the appeal of gold.
"What we're seeing at the moment with the dollar, bond yields and gold are macro trades of concern - not just about the coronavirus but also about the fiscal cliff in the US," said Seema Shah, chief strategist at Principal Global Investors in London.
"There are real concerns that without a (US stimulus) deal, we will be looking at a very tough fourth quarter for the US economy and therefore the global economy."
White House negotiators on Tuesday vowed to work "around the clock" with congressional Democrats to try to reach a deal on coronavirus relief by the end of this week, as the pandemic takes a heavy toll on American life.
The global death toll from the coronavirus surpassed 7,00,000 on Wednesday, according to a Reuters tally, with the United States, Brazil, India and Mexico leading the rise in fatalities.
MORE STIMULUS EXPECTED
This backdrop has boosted expectations for more stimulus, with the president of the Federal Reserve Bank of San Francisco saying on Tuesday that the US economy will need more support than initially thought.
The five-year Treasury yield hit a record low on Tuesday and the benchmark 10-year Treasury yield fell to a five-month low at around 0.51 percent, holding near those levels on Wednesday.
In Asia, Japan's Nikkei dipped 0.26 percent and Australia's benchmark index slipped 0.6 percent, notable underperformers in otherwise generally upbeat Asian stock markets. South Korea's Kospi hit its highest level since October 2018.
"Significantly increased odds" of more monetary policy stimulus from the US Federal Reserve is a key driver of equities although the rally has been reined in by stretched valuations, Mizuho analysts wrote in a note.
The dollar remained under pressure.
A hardening perception that the US economic recovery is lagging Europe has buttressed the euro, pushing it above $1.19 in the last couple of days.
The common currency last traded up 0.1 percent at $1.1815 . Most other major currencies were also up against the dollar, pushing its index towards last week's two-year low of 92.53.
"The ongoing fall in US real yields is helping to lift the price of gold and weakening the US dollar," said Lee Hardman, currency analyst at MUFG, adding that the bank had lowered its forecasts for the dollar on the assumption that the Federal Reserve will loosen policy further this year.
In commodities, oil prices rose with Brent crude up 0.9 percent at $44.43 a barrel. US crude also added 0.9 percent to $42.06.