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.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
TikTok abounds with viral videos accusing prestigious brands of secretly manufacturing luxury goods in China so they can be sold at cut prices. However, while these “revelations” are spurious, behind them lurks a well-oiled machine for selling counterfeit goods that is making the most of the confusion surrounding trade tariffs. Chinese content creators who portray themselves as workers or subcontractors in the luxury goods business claim that Beijing has lifted confidentiality clauses on local subcontractors as a way to respond to the huge hike in customs duties imposed on China by US President Donald Trump. They say this Chinese decision, of which Agence
RSS