Commodity markets enjoyed mixed fortunes this week as traders balanced gloomy eurozone economic news, alongside contrasting jobs data and “fiscal cliff” fears in the US.
Many markets fell heavily along with the euro on Thursday after the European Central Bank forecast that the recession-mired eurozone economy would continue to contract next year and only return to growth in 2014.
Sentiment was also rocked by news that the 17-nation eurozone tipped into recession in the third quarter, or three months to September, with the European bloc’s economy shrinking 0.1 percent from the second quarter, when it contracted 0.2 percent.
OIL: Brent prices dived to one-month lows this week on the back of eurozone gloom and the strong greenback, which makes US dollar-priced commodities more expensive for buyers using weaker currencies and tends to hit demand.
Prices took another blow from news of shrinking US manufacturing activity and downbeat jobs data from payrolls firm ADP.
However, crude futures won a very brief boost on Friday after better-than-expected non-farm payrolls data in the US, which is a top consumer of many raw materials.
Meanwhile, the lack of a breakthrough over the fiscal cliff in Washington has kept a cloud hanging over markets.
Next week, attention will switch to Vienna, where the 12-nation OPEC will decide the cartel’s oil production ceiling.
By Friday on the New York Mercantile Exchange, West Texas Intermediate (WTI), or light sweet crude, for delivery in January sank to US$86.27 a barrel from US$87.85 a week earlier.
On London’s Intercontinental Exchange, Brent North Sea crude for January fell to US$106.93 a barrel from US$110.53.
PRECIOUS METALS: Gold prices hit a one-month low at US$1,684.77, but clawed back some losses on speculation over possible European Central Bank action to boost growth, traders said.
“Gold has bounced from its lows as the market prices in the likelihood of short-term liquidity measures in Europe following weak GDP data, and [pushed] the precious metal higher,” CMC Markets analyst Michael Hewson said.
By late on Friday on the London Bullion Market, gold fell to US$1,701.50 an ounce from US$1,726 a week earlier.
Silver slid to US$32.85 an ounce from US$34.28.
On the London Platinum and Palladium Market, platinum gained to US$1,600 an ounce from US$1,612.
Palladium climbed to US$698 an ounce from US$685.
COCOA: Prices retreated on profit-taking as traders eyed the prospect of rising supplies in West Africa.
By Friday on LIFFE, London’s futures exchange, cocoa for delivery in March dropped to £1,551 a tonne from £1,567 a week earlier.
On New York’s NYBOT-ICE exchange, cocoa for March dipped to US$2,424 a tonne from US$2,457 a week earlier.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to