SINGAPORE, LONDON - Gold hit a record and bonds rallied on Wednesday, while chip stocks tumbled.

Sterling ticked higher after British inflation held at 2 percent year-on-year in June against forecasts for 1.9 percent, with services inflation stuck at an uncomfortable 5.7 percent.

Europe's Stoxx share index futures traded 0.2 percent lower. S&P 500 futures were also 0.5 percent lower after the cash index hit a record high in the previous session.

In Taiwan, TSMC fell 3 percent, wiping out close to $30 billion from the market value of the world's largest chipmaker and a key player in the global supply chain.

ASML, the largest equipment supplier to chipmakers, reported better-than-expected profit in the second quarter, but its shares dropped as much as 7.7 percent.

Gold glitters

In Asia, New Zealand shares hit their highest since March 2022 after data showed inflation slowing, though the rates market dipped and the currency rose on sticky domestically driven inflation.

Treasuries held gains that had pushed 10-year US yields to four-month lows overnight after Federal Reserve Chair Jerome Powell said recent cooling in inflation "adds somewhat to confidence" that consumer prices are coming under control.

Fed funds futures have fully priced a US rate cut for September, followed by two more before the end of January 2025.

Ten-year yields were steady at 4.167 percent and two-year yields hovered at 4.45 percent, while German Bund yields fell 1 bp to 4.423 percent.

Lower yields helped propel gold sharply higher and through chart resistance around $2,450 per ounce despite a broadly firm dollar. It touched a record $2,482 overnight.

"Gold's ability to find support in any condition this year is worth highlighting," said Commonwealth Bank of Australia commodity strategist Vivek Dhar.

"While gold prices face uncertainty in coming months, the uncertainty has a positive skew, raising the risk that gold rises above our forecast of $2,500/oz by the end of the year."

The Japanese yen strengthened as trading began in Europe on Wednesday, pushing the dollar down 0.75 percent to 157.08, well off early July's 38-year high of 161.96, after a few rounds of likely intervention from Tokyo authorities late last week.

The euro was steady at $1.0905.

Oil prices slipped slightly. Brent crude futures rose 0.4 percent to $84.04 barrel and US crude futures gained 0.5 percent to trade at $81.12.