Gold plunges, Wall Street shares rise

Gold futures have plunged below $US1800 in a dramatic reversal from a record-setting run over the past two weeks.

Gold has notched five consecutive records that culminated in Monday's close of $US1891.90 an ounce in New York.

Stocks on Wall Street, meanwhile, rose strongly as investors assessed an upbeat durable goods report and awaited Federal Reserve chairman Ben Bernanke's highly anticipated speech at Jackson Hole on Friday.

A rising stock market and sudden doubts about whether the Fed would signal any fresh stimulus measures were the principal drivers behind the gold selloff.

Gold futures ended down $US104, or 5.6%, at $US1757.30 an ounce for the most-active contract. The thinly traded front-month contract dropped the same amount to settle at $US1754.10.

At the sharemarket close (8am NZ time), the Dow Jones Industrial Average was up 143.95 points, or 1.3%, to 11,320.71.

The S&P 500 index also gained 1.3% to 1177.60. Utility and financial stocks rose, while the energy and material sectors lagged. The technology-heavy Nasdaq Composite rose 0.9% to 2467.69.

Durable goods manufacturing bounced back last month, giving the fragile economy a much-needed boost. Some investors hope Mr Bernanke will provide further monetary stimulus but others reckon his speech will merely elaborate on the Fed's economic outlook rather than break new ground and announce a third round of quantitative easing, or QE3.

Other markets: Europe up, Asia down
European stocks racked up healthy gains as investors welcomed some better-than-expected US data and expectations of further monetary stimulus.

The Stoxx Europe 600 index closed up 1.4% at 229.79. The UK's FTSE 100 index added 1.5% to 5205.85, France's CAC-40 index ended up 1.8% at 3139.55 and Germany's DAX rose 2.7% to 5681.08.

Asian stocks declined after struggling to hold early gains. Financial stocks lost ground in Tokyo as Moody's cut the nation's debt ratings by one notch to Aa3 from Aa2 with a stable outlook, citing wide budget deficits and burgeoning debt since 2009.

The Nikkei Stock Average allowed early advances to slip by, ending 1.1% lower at 8639.61.

Hong Kong's Hang Seng Index fell 2.1% to 19,466.79, China's Shanghai Composite shed 0.5% to 2541.09 and Taiwan's Taiex ended 0.6% lower at 7502.93.

Australia's S&P/ASX 200 index shed 0.1% to 4167.60 and Korea's Kospi fell 1.2% to 1754.78.

Commodities: Oil rises as inventories fall
Crude futures rose after a US government report showed inventories fell last week as refiners ramped up operations but that fuel stockpiles rose.

Light, sweet crude for October delivery was up 36USc, or 0.4%, at $US85.80 a barrel in New York. Brent crude on traded up 74USc, or 0.7%, to $US110.05 a barrel.

Currencies: Dollar rises against euro
The US dollar turned up against the euro after German Chancellor Angela Merkel reiterated her opposition to both breaking up the euro zone and issuing bonds backed by multiple countries.

The euro was at $US1.4407 compared with $US1.4441 late on Tuesday.

The dollar traded at ¥76.78 from ¥76.67, while the euro was at ¥110.61 compared with ¥110.71.

The UK pound was trading at $US1.6374 from $US1.6494, and the dollar bought 0.7949 Swiss franc from 0.7924 franc.