Commodities mostly fell this week as traders reacted to geopolitical events in the Middle East — particularly Iran’s breakthrough nuclear deal with world powers.
Markets also ended the week on a subdued note amid Thursday’s Thanksgiving holiday in the US.
OIL: World oil prices slid on Monday after a US-led deal was struck between world powers and Iran over Tehran’s controversial nuclear program.
Brent North Sea crude shed more than US$2 at one stage after major oil producer Iran agreed on Nov. 24 to curb its nuclear program for the next six months in exchange for limited sanctions relief. The preliminary accord with world powers was expected to lay the foundations for a comprehensive agreement later this year.
“What we see ... is a downward correction of prices after the deal,” said Victor Shum of IHS Purvin and Gertz consultants.
“The impact of the deal on global oil supply will however be limited since much of the sanctions continue to remain in place,” he said.
The oil market rebounded slightly on Wednesday after official data revealed a smaller-than-expected increase for US commercial crude inventories, indicating soft demand in the world’s biggest economy.
The US Department of Energy said that US crude inventories grew by 1.6 million barrels last week, less than expectations for a rise of 1.9 million barrels.
Oil prices remain pressured by the sustained rise in official crude stockpiles over the past 10 weeks.
Elsewhere, concerns over escalating political strife in Libya continued to drive European benchmark Brent crude.
Four soldiers and at least 10 people were killed on Thursday during violence in the North African state in the aftermath of a three-day strike in protest over militias.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in January firmed to US$110.93 a barrel from US$110.33 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for January sank to US$93.58 a barrel from US$94.69.
PRECIOUS METALS: Gold slid on Monday to its lowest point for four-and-a-half months, as investors shunned the safe-haven metal amid easing concerns over Iran.
“Gold temporarily dipped to a 4.5-month low of US$1,225 per troy ounce as the new week of trading got underway,” Commerzbank analysts said.
“This is doubtless due first and foremost to reduced geopolitical risks following a breakthrough in the nuclear talks between the West and Iran,” they said.
By late Friday on the London Bullion Market, the price of gold rose to US$1,253 an ounce from US$1,246.25 a week earlier.
Silver held steady at US$19.93 an ounce.
On the London Platinum and Palladium Market, platinum slipped to US$1,376 an ounce from US$1,396.
Palladium increased to US$724 an ounce from US$721.
BASE METALS: Industrial metals followed oil lower after the Iranian deal, and amid the Thanksgiving break.
“Ahead of the US Thanksgiving holiday on Thursday, the base metals markets have been quiet, with participants happy to sit on the sidelines,” Standard Bank analyst Leon Westgate said.
“As a consequence, turnover has been pretty subdued, while prices have also tended to edge sideways with the metals trading in fairly limited intraday ranges,” he said.
By Friday on the London Metal Exchange, copper for delivery in three months dipped to US$7,068 a tonne from US$7,077.77 a week earlier.
Three-month aluminum reversed to US$1,763 a tonne from US$1,793.
Three-month lead slid to US$2,086 a tonne from US$2,108.
Three-month tin dipped to US$22,760 a tonne from US$22,845.
Three-month nickel dropped to US$13,501 a tonne from US$13,560, and three-month zinc declined to US$1,883 a tonne from US$1,909.50.
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