World equities climbed to five-month highs, gold reached a record peak and government bonds saw strong demand as investors digested conflicting signals on the global recovery and struggled to overcome a bout of nerves over eurozone sovereign debt.

The week’s key event came in the US as the Federal Reserve signalled it was willing to sanction a further round of asset purchases, or quantitative easing, if economic growth failed to recover in coming months. Crucially, the US central bank downgraded its inflation outlook.

The Fed’s comments paved the way for gold’s advance and for Treasury bond yields and the dollar to move decisively lower. US equities initially came under moderate pressure but rallied strongly on Friday as doubts over the economy were soothed by encouraging data on US durable goods orders.