Gold is back to a currency play, with prices surging only for British investors, as the pound posted the biggest drop in almost eight months.
Bullion priced in sterling on Friday rose as much as 2.2 percent to ￡1,007.52 per ounce, a seven-week high, after British Prime Minister Theresa May failed to win an overall majority.
In US dollar terms, gold futures fell, posting its first weekly loss in more than a month, as market attention for the rest of the world refocuses on the prospect of US interest rates rising next week.
The impact on the metal used as a hedge against political and economic uncertainties has been muted outside of the UK, even as May battles to survive amid calls for her resignation after a disastrous election that cost her party to lose its parliamentary majority just days before Brexit negotiations with the EU begin.
The US dollar rallied, while US Treasury yields rose, hurting gold’s appeal as an alternative investment.
“It seems like long liquidation on gold and it looks vulnerable to more setbacks,” Phil Streible, a senior market strategist at RJO Futures in Chicago, said in a telephone interview.
“Gold has been such a great trade and there was so much optimism, but it just failed to breach through US$1,300. People are now looking at interest rates, with bond yields rising,” Streible said.
Gold for August delivery on Friday fell about 0.6 percent to settle at US$1,268.80 an ounce on the Comex in New York, after slipping as much as 1 percent earlier. The contract is down 0.9 percent from last week’s US$1,280.20
Traders are pricing in a 96 percent chance that the US Federal Reserve might raise interest rates at its meeting next week, according to Fed fund futures data compiled by Bloomberg.
Some investors took advantage of higher prices for sterling-priced gold to sell positions, according to BullionVault, a London-based online trading platform.
“Traders were not as active as they were during the early hours of the Brexit referendum result,” BullionVault head of research Adrian Ash said in an e-mail.
“The political situation is anything but strong and stable,” said Jonathan Butler, a precious metals strategist at Mitsubishi Corp in London. “There is quite a bit of potential for support for gold, certainly in sterling and possibly also in [US] dollars, in the near term.”
PALLADIUM
In the main commodity markets, nothing is doing better than palladium this year.
The metal is up 30 percent, beating 33 other raw materials, including lean hogs and aluminum, tracked by Bloomberg.
On Friday, spot prices surged as much as 7.9 percent to a 16-year high of US$928.36 an ounce before settling at US$885.57 an ounce.
The metal gained 5.2 percent this week.
It is now almost as expensive as platinum for the first time since 2001, helped by Volkswagen AG’s emissions scandal two years ago that has prompted consumers to switch from diesel to gasoline cars.
PERSISTENT RUMORS: Nvidia’s CEO said the firm is not in talks to sell AI chips to China, but he would welcome a change in US policy barring the activity Nvidia Corp CEO Jensen Huang (黃仁勳) said his company is not in discussions to sell its Blackwell artificial intelligence (AI) chips to Chinese firms, waving off speculation it is trying to engineer a return to the world’s largest semiconductor market. Huang, who arrived in Taiwan yesterday ahead of meetings with longtime partner Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), took the opportunity to clarify recent comments about the US-China AI race. The Nvidia head caused a stir in an interview this week with the Financial Times, in which he was quoted as saying “China will win” the AI race. Huang yesterday said
Nissan Motor Co has agreed to sell its global headquarters in Yokohama for ￥97 billion (US$630 million) to a group sponsored by Taiwanese autoparts maker Minth Group (敏實集團), as the struggling automaker seeks to shore up its financial position. The acquisition is led by a special purchase company managed by KJR Management Ltd, a Japanese real-estate unit of private equity giant KKR & Co, people familiar with the matter said. KJR said it would act as asset manager together with Mizuho Real Estate Management Co. Nissan is undergoing a broad cost-cutting campaign by eliminating jobs and shuttering plants as it grapples
The Chinese government has issued guidance requiring new data center projects that have received any state funds to only use domestically made artificial intelligence (AI) chips, two sources familiar with the matter told Reuters. In recent weeks, Chinese regulatory authorities have ordered such data centers that are less than 30 percent complete to remove all installed foreign chips, or cancel plans to purchase them, while projects in a more advanced stage would be decided on a case-by-case basis, the sources said. The move could represent one of China’s most aggressive steps yet to eliminate foreign technology from its critical infrastructure amid a
MORE WEIGHT: The national weighting was raised in one index while holding steady in two others, while several companies rose or fell in prominence MSCI Inc, a global index provider, has raised Taiwan’s weighting in one of its major indices and left the country’s weighting unchanged in two other indices after a regular index review. In a statement released on Thursday, MSCI said it has upgraded Taiwan’s weighting in the MSCI All-Country World Index by 0.02 percentage points to 2.25 percent, while maintaining the weighting in the MSCI Emerging Markets Index, the most closely watched by foreign institutional investors, at 20.46 percent. Additionally, the index provider has left Taiwan’s weighting in the MSCI All-Country Asia ex-Japan Index unchanged at 23.15 percent. The latest index adjustments are to
RSS