US stocks rise on rate hopes as gold hits record high

NEW YORK - US and European stock markets rose on Wednesday and gold hit a record high as the Federal Reserve kept alive expectations of rate cuts later this year and the British government unveiled a pro-growth budget.

In volatile trading, gold exceeded its previous high of $2,141.79 as expectations of lower interest rates hurt the dollar.

US stocks had slipped earlier this week as investors locked in profits ahead of Wednesday's congressional testimony of Fed chief Jerome Powell.

All three major US indices climbed to end the day, even though there were also concerns surrounding embattled lender New York Community Bancorp, which announced Wednesday that it has lined up more than $1-billion from investors led by the firm of former US treasury secretary Steven Mnuchin.

The market was "not shaken" by Powell's comments, said Steve Sosnick of Interactive Brokers.

While traders were nervous ahead of the Fed chief's testimony, his remarks were "pretty close" to those after the most recent Fed meeting, he added.

More indications about the interest rate outlook will come Friday with the release of non-farm payrolls.

Eurozone stocks advanced as investors eyed Thursday's monetary policy decision from the European Central Bank.

The ECB is expected to keep rates steady but may give clues about its future intentions.

London equities climbed as Finance Minister Jeremy Hunt announced a fresh tax cut for millions of workers ahead of a general election expected this year.  

Bitcoin eased somewhat, a day after a record-breaking run, while gold marched to record heights.

The world's biggest cryptocurrency has soared this week on tight supplies and moves towards making bitcoin investment more accessible.

World oil prices gained ground on rising risk appetite and signs of strong US energy demand, dealers said.