Gold rose more than 1 percent to a record high yesterday as concerns about accelerating inflation and weak economic growth prompted investors to seek relatively safer assets, while supply concerns boosted oil and copper.
Asian stocks also rose, led by gains in Australia thanks to higher resource stocks, although volumes were light with Japan out on holiday.
Many investors have been reducing their positions and cutting risk as a strong year begins to wind down and with economic indicators still showing scant evidence of a sustained recovery.
Highlighting the growing concerns evident in the market, yields on US two-year Treasuries have fallen below 0.75 percent, approaching levels seen at the height of the financial crisis in December last year.
“It worries me that two-year yields are trading as they are plus [short-dated] bill rates went negative and gold is bid, bid, bid,” said Robert Rennie, chief currency strategist at Westpac. “It makes me think there is a huge flight to quality going on that hasn’t hit FX yet ... perhaps a bit of a warning sign.”
The US dollar, which often rises in times of increased uncertainty and worries about global growth, gave up early gains against a basket of currencies, while the commodity-linked Australian dollar benefited from the strong gold price.
Spot gold was trading around US$1,162 an ounce, having hit a peak around US$1,163, up a third so far this year.
Helped by the safe-haven bid and purchases by a number of central banks, gold has surged since the start of this month, hitting nine record highs and gaining 11 percent in the past three weeks.
The heightened sense of caution has stalled a rally in global stocks, which have traded in a broad range since the middle of last month.
After falling last week, MSCI’s index of Asia-Pacific stocks outside of Japan rose 0.7 percent, taking its gains so far this year to almost two-thirds.
Japanese markets were closed for a holiday.
Australian shares rose 0.6 percent, with shares of Drillsearch Energy Ltd jumping more than 19 percent after the company reported a promising oil find.
Crude oil futures rose 1 percent to US$78.24 a barrel, supported by heightened tensions between Iran and Western nations that raised speculation of a potential supply risk.
Iran’s armed forces launched large-scale air defense war games on Sunday to show off the country’s deterrence capabilities in the face of pressure from the West over its nuclear program, and a cleric in the Revolutionary Guards warned that the Islamic Republic would fire missiles at “the heart of Tel Aviv” if attacked.
“There’s always a supply risk premium that can arise from these elevated tensions in the Middle East and that is a factor pushing up oil prices this morning,” said Toby Hassall, a commodities analyst at the Commonwealth Bank of Australia.
Supply concerns also supported copper, which was testing US$7,000 a tonne amid strikes by workers in Chilean mines.
The Eurovision Song Contest has seen a surge in punter interest at the bookmakers, becoming a major betting event, experts said ahead of last night’s giant glamfest in Basel. “Eurovision has quietly become one of the biggest betting events of the year,” said Tomi Huttunen, senior manager of the Online Computer Finland (OCS) betting and casino platform. Betting sites have long been used to gauge which way voters might be leaning ahead of the world’s biggest televised live music event. However, bookmakers highlight a huge increase in engagement in recent years — and this year in particular. “We’ve already passed 2023’s total activity and
Nvidia Corp CEO Jensen Huang (黃仁勳) today announced that his company has selected "Beitou Shilin" in Taipei for its new Taiwan office, called Nvidia Constellation, putting an end to months of speculation. Industry sources have said that the tech giant has been eyeing the Beitou Shilin Science Park as the site of its new overseas headquarters, and speculated that the new headquarters would be built on two plots of land designated as "T17" and "T18," which span 3.89 hectares in the park. "I think it's time for us to reveal one of the largest products we've ever built," Huang said near the
China yesterday announced anti-dumping duties as high as 74.9 percent on imports of polyoxymethylene (POM) copolymers, a type of engineering plastic, from Taiwan, the US, the EU and Japan. The Chinese Ministry of Commerce’s findings conclude a probe launched in May last year, shortly after the US sharply increased tariffs on Chinese electric vehicles, computer chips and other imports. POM copolymers can partially replace metals such as copper and zinc, and have various applications, including in auto parts, electronics and medical equipment, the Chinese ministry has said. In January, it said initial investigations had determined that dumping was taking place, and implemented preliminary
Intel Corp yesterday reinforced its determination to strengthen its partnerships with Taiwan’s ecosystem partners including original-electronic-manufacturing (OEM) companies such as Hon Hai Precision Industry Co (鴻海精密) and chipmaker United Microelectronics Corp (UMC, 聯電). “Tonight marks a new beginning. We renew our new partnership with Taiwan ecosystem,” Intel new chief executive officer Tan Lip-bu (陳立武) said at a dinner with representatives from the company’s local partners, celebrating the 40th anniversary of the US chip giant’s presence in Taiwan. Tan took the reins at Intel six weeks ago aiming to reform the chipmaker and revive its past glory. This is the first time Tan
RSS