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.
TECH TITAN: Pandemic-era demand for semiconductors turbocharged the nation’s GDP per capita to surpass South Korea’s, but it still remains half that of Singapore Taiwan is set to surpass South Korea this year in terms of wealth for the first time in more than two decades, marking a shift in Asia’s economic ranks made possible by the ascent of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電). According to the latest forecasts released on Thursday by the central bank, Taiwan’s GDP is expected to expand 4.55 percent this year, a further upward revision from the 4.45 percent estimate made by the statistics bureau last month. The growth trajectory puts Taiwan on track to exceed South Korea’s GDP per capita — a key measure of living standards — a
Samsung Electronics Co shares jumped 4.47 percent yesterday after reports it has won approval from Nvidia Corp for the use of advanced high-bandwidth memory (HBM) chips, which marks a breakthrough for the South Korean technology leader. The stock closed at 83,500 won in Seoul, the highest since July 31 last year. Yesterday’s gain comes after local media, including the Korea Economic Daily, reported that Samsung’s 12-layer HBM3E product recently passed Nvidia’s qualification tests. That clears the components for use in the artificial intelligence (AI) accelerators essential to the training of AI models from ChatGPT to DeepSeek (深度求索), and finally allows Samsung
READY TO HELP: Should TSMC require assistance, the government would fully cooperate in helping to speed up the establishment of the Chiayi plant, an official said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said its investment plans in Taiwan are “unchanged” amid speculation that the chipmaker might have suspended construction work on its second chip packaging plant in Chiayi County and plans to move equipment arranged for the plant to the US. The Chinese-language Economic Daily News reported earlier yesterday that TSMC had halted the construction of the chip packaging plant, which was scheduled to be completed next year and begin mass production in 2028. TSMC did not directly address whether construction of the plant had halted, but said its investment plans in Taiwan remain “unchanged.” The chipmaker started
‘COMPLEMENTARY’: The company unveiled its new Dimensity 9500 smartphone chip, which would power Vivo’s X300 series, set to launch in Taiwan in November MediaTek Inc (聯發科), the world’s largest handset chip designer, yesterday said its strategic collaboration with Nvidia Corp is on track and expected to bear fruit within two to three years, easing concerns over Nvidia’s newly announced partnership with Intel Corp to develop PC chips. MediaTek shares fell 2.43 percent to NT$1,405, underperforming the TAIEX’s 1.18 percent gain, as investors worried that Nvidia’s work with Intel might overshadow its joint PC-chip projects with MediaTek based on Arm Holdings PLC’s architecture. “We are quite complementary to one another in terms of product and technology,” MediaTek president Joe Chen (陳冠州) told reporters during the launch
RSS