NEW YORK: Global equity markets were flat on Monday, with safe-haven assets such as the US dollar and gold making gains as signs of economic recovery pointed to future cuts in central bank stimulus.
The dollar rallied, with expectations rising that strong US data will prompt the Federal Reserve to act sooner rather than later to pare back its monthly purchase of about $85 billion in bonds.
Gold hit its highest in nearly three weeks in thin trade, and the world's biggest gold exchange-traded fund, SPDR Gold Trust, recorded its first inflow in two months on Friday, growing by 0.2 percent to 911.13 tonnes.
Spot gold rose as much as 2.2 percent to $1,343.06 an ounce, its highest since July 24. It was last at $1,340.70.
Several Fed officials have said the central bank could move as early as September if the US economy continues to improve. But many investors fear slower growth without the Fed's support, which has helped fuel a nearly 19 percent gain in the benchmark S&P 500 index so far this year.
Some equity investors believe the equity market's recent stall is nothing more than a pause in the rally.
"This is a back-and-fill after the remarkable move we've seen this year, and that's healthy," said Chris Bertelsen, chief investment officer of Global Financial Private Capital in Sarasota, Florida.
Signs that China's slowdown may have run its course and expectations that data this week will indicate the euro zone is pulling out of its longest recession on record are bolstering hopes that the global economy is gaining strength.
Wall Street was little changed, with the Nasdaq slightly higher, while European shares traded a tad below break-even. MSCI's all-country world index, a measure of 45 equity markets around the world, was down 0.06 percent.
The Dow Jones industrial average was down 4.03 points, or 0.03 percent, at 15,421.48. The Standard & Poor's 500 Index was down 2.02 points, or 0.12 percent, at 1,689.40. The Nasdaq Composite Index was up 8.00 points, or 0.22 percent, at 3,668.11.
"We shouldn't equate the all-time highs with the market being rich. There's still value in the market, but in the short term we've gotten ahead of ourselves," said Matthew Keator, partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.
The dollar slipped against the yen early on Monday after data showed Japan's economy grew an annualized 2.6 percent in the period from April to June, a third straight quarter of expansion, though slower than expected.
The yen reversed early gains, with the dollar up 0.43 percent at 96.61 yen. Against the euro, the yen was up slightly at 128.34.
The benchmark 10-year US Treasury note was up 4/32, the yield at 2.5659 percent.
Brent crude oil dropped below $108 per barrel after a sharp rally on Friday. Losses were checked, however, by supply outages in major producers Libya and Iraq.
Brent slipped 26 cents to $107.96 a barrel. US crude was off 41 cents at $105.56.
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