Gold tumbled this week close to a three-year low under US$1,200 per ounce, hit by receding inflation fears, upbeat US data, a strong dollar and expectations of an end to the US Federal Reserve’s quantitative easing stimulus.
Other commodities experienced mixed fortunes as traders also eyed China’s easing liquidity crisis and stronger global stock markets.
PRECIOUS METALS: Gold dived under US$1,200 on Thursday, before plunging on Friday to US$1,180.50 per ounce, which was the lowest level since Aug. 3, 2010.
The precious metal — whose twin drivers are jewelry and investment demand — has seen its value wane recently in response to a strong greenback, which makes dollar-priced gold more expensive for buyers using rival currencies, weighing on demand.
“The traditional drivers of demand for gold have all weakened or reversed in the last few months,” Capital Economics commodities analyst Julian Jessop said.
“Demand for protection against inflation has faded as the Fed has started to signal the end of quantitative easing in the US. Demand for safe havens has diminished as the worst of the crisis in the eurozone appears to be over,” he said.
By late Friday on the London Bullion Market, the price of gold retreated to US$1,192 an ounce from US$1,295.25 a week earlier.
Silver recoiled to US$18.86 an ounce from US$19.87.
On the London Platinum and Palladium Market, platinum fell to US$1,317 an ounce from US$1,395.
Palladium decreased to US$643 an ounce from US$672.
OIL: Global oil prices rallied as traders drew strength from rising equity markets, upbeat US economic data and easing concerns over the Chinese liquidity crisis.
“This week was mostly macro driven; volumes are very thin and we are simply benefiting from firmer equity markets as concerns over China eased,” VTB Capital analyst Andrey Kryuchenkov said.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in August rallied to US$102.88 per barrel from US$100.19 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for August rose to US$97.03 a barrel compared with US$93.24 a week earlier.
BASE METALS: Base or industrial metal prices diverged as traders also tracked the news flow on the liquidity crisis in key consumer China, dealers said.
By Friday on the London Metal Exchange, copper for delivery in three months slid to US$6,764.50 a tonne from US$6,810 a week ago.
Three-month aluminum fell to US$1,777 a tonne from US$1,795; three-month lead rose to US$2,060 a tonne from US$2,026; and three-month tin increased to US$19,775 a tonne from US$19,605.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is