Commodity prices diverged this week as markets focused on a deal to avert a US-led military attack on Syria and reacted to the US Federal Reserve’s surprise decision on stimulus.
The US and Russia had last weekend agreed on a deal to dismantle Syria’s chemical weapons, easing crude supply fears.
The week’s other major market-moving event occurred on Wednesday when the Federal Open Market Committee (FOMC) decided against scaling down its US$85 billion a month bond-buying spree.
The FOMC said that although the economy appears to be holding up amid government spending cuts, it “decided to await more evidence that progress will be sustained” before deciding to scale down the stimulus package.
OIL: Crude futures retreated over the week following volatile trading triggered by easing Middle East supply concerns and the Fed’s surprise action.
“The main focus has returned to the oil [supply and demand] fundamentals,” said Myrto Sokou, senior research analyst at Sucden brokers.
Analysts said the return to production of Libyan oil fields and the easing of tensions in the Middle East after Syria agreed to a plan to put its chemical weapons arsenal under international control helped ease prices.
Protests by oil field and export terminal workers since July had crippled Libyan production.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in November stood at US$109.05 a barrel compared with US$111.90 for the expired October contract a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for October dropped to US$105.59 a barrel from US$107.58.
PRECIOUS METALS: Prices rose following the Fed announcement.
Gold dropped below US$1,300 an ounce for the first time since Aug. 8 on Wednesday before the Fed’s policy decision.
Traditionally a hedge against inflation, gold had tumbled on growing speculation over Fed tapering. Many investors argue that QE fuels higher inflation.
However, prices soon rebounded. By late Friday on the London Bullion Market, the price of gold rose to US$1,349.25 an ounce from US$1,318.50 a week earlier.
Silver climbed to US$22.74 an ounce from US$21.72.
On the London Platinum and Palladium Market, platinum edged up to US$1,447 an ounce from US$1,441.
Palladium grew to US$726 an ounce from US$700.
BASE METALS: Base or industrial metals rebounded.
“Metal prices surged noticeably following the Fed’s meeting,” Commerzbank analysts said.
However, Julian Jessop, head of commodities research at Capital Economics consultants, said that “industrial metals are far more sensitive to the near-term prospects for economic activity than to the outlook for monetary policy, with developments in China typically more important than those in the US”.
Three-month aluminum rose to US$1,827 a tonne from US$1,791.50.
Three-month lead grew to US$2,105 a tonne from US$2,091.50
Three-month tin gained to US$23,285 a tonne from US$22,579.
Three-month nickel increased to US$14,370 a tonne from US$13,692.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last