Many commodities plunged this week, with oil approaching 10-month lows, as traders worried about the eurozone debt crisis, the strong US dollar, Chinese demand and falling global share prices.
Gold faced heavy losses as many traders also took profits after striking a record high the previous week.
“The commodity markets have been driven by currency movements and the general negative sentiment across the global equity markets,” Sucden analyst Myrto Sokou said.
The euro plummeted to a four-year low of US$1.2144 on Wednesday as fears grew about massive debt and high public deficits in the eurozone.
Markets were also shocked by Germany’s unilateral move to impose restrictions on what it termed highly speculative trading practices.
“Commodities have received further pressure from a strengthening US dollar and amid concerns about the Chinese economic slowdown that could affect demand levels for oil and base metals in the near-term,” Sokou said.
In a study published this week, meanwhile, London-based consultancy Capital Economics said crude oil and industrial metals have plunged by between 15 percent and 25 percent in value between April 20 and May 20.
“The sharp falls in many commodity prices over the past month reflect a mix of pressures and worries, some of which are temporary but most of which are not,” economist Julian Jessop at Capital Economics said.
OIL: Crude oil nosedived as the euro plumbed a four-year US dollar low, and investors reacted to unexpectedly weak jobless claims data in top energy consumer the US.
New York crude collapsed on Thursday to US$64.24, its lowest level since July 30, 2009, while Brent oil hit US$70.20, a level last seen in early February.
“Crude oil prices tumbled this week ... as the euro slid to a four-year low against a robust US dollar that weighed heavily on most commodity prices,” Sokou said. “Prices extended losses amid news that Germany decided to ban naked short-selling of some securities [in a move] that raised further concerns over the eurozone’s debt crisis and its long-term growth opportunities.”
VTB Capital’s Andrey Kryuchenkov said it was “the same old story of yet another week of losses as investors continue to pull out of riskier assets.”
Oil also took a hit from the faltering US economic recovery, after the US Labor Department said initial jobless claims totaled 471,000 in the week to May 15, up 5.6 percent from the prior week.
By late on Friday on the New York Mercantile Exchange, Texas light, sweet crude for delivery in July sank to US$70.02, from US$73.25 a week earlier for the now-expired June contract.
On London’s Intercontinental Exchange, Brent North Sea crude for July delivery dropped to US$71.72, compared with US$77.75 for the June contract.
PRECIOUS METALS: Prices plunged on the back of the strong US dollar, with gold dropping nearly five percent, silver losing almost 10 percent and palladium wiping out more than one fifth of its value. Platinum hit the lowest point since late December last year and ended the week down 13.3 percent.
“Gold tumbled in volatile trading ... with investors cashing in on the precious metal,” Kryuchenkov said.
Gold had hit an all-time pinnacle of US$1,249.40 an ounce last week, dragging sister metal silver to a two-year peak.
By late on Friday on the London Bullion Market, gold tumbled to US$1,179.75 an ounce from US$1,236.50 the previous week.
Silver slid to US$17.72 an ounce from US$19.64.
On the London Platinum and Palladium Market, platinum slumped to US$1,492 an ounce from US$1,721.
Palladium collapsed to US$419 an ounce from US$536.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS