Gold retreated to the lowest level in four weeks on renewed concern that the US Federal Reserve will increase US interest rates next month, denting demand for the metal as a store of value.
Bullion for immediate delivery fell as much as 0.7 percent to US$1,134.39 an ounce, the lowest level since Oct. 5, and traded at US$1,141.45 at 3:07pm in Singapore, according to Bloomberg generic pricing. Prices dropped 1.9 percent last week, the most since Aug. 28.
The precious metal fell for the past five quarters amid speculation the Fed might increase interest rates for the first time since 2006, diminishing the metal’s appeal because it does not pay interest. US policy makers signaled last week they are still considering tighter monetary policy this year, surprising many gold investors who had been buying on speculation that a spate of uneven US economic data would keep rates low for longer.
Gold prices “came under some pressure after renewed concerns around Fed rate hike,” Australia and New Zealand Banking Group Ltd said in a note yesterday.
Traders see a 50 percent chance the US central bank is to raise its benchmark rate from near zero next month, according to futures data compiled by Bloomberg. That is up from 34 percent at the start of last week, before the US Federal Open Market Committee’s statement tomorrow.
Among US data this week are figures on monthly non-farm payrolls, due on Friday. Before that, US Fed Chair Janet Yellen is scheduled to testify tomorrow before the US House Financial Services Committee.
AI SPLURGE: The four major US tech companies have lost more than US$950 billion in value since releasing earnings and outlooks, while equipment makers were gaining Four of the biggest US technology companies together have forecast capital expenditures that would reach about US$650 billion this year — a flood of cash earmarked for new data centers and all the gear within them. The spending planned by Alphabet Inc, Amazon.com Inc, Meta Platforms Inc and Microsoft Corp, all in pursuit of dominance in the still-nascent market for artificial intelligence (AI) tools, is a boom without a parallel this century. Each of the companies’ estimates for this year is expected either near or surpass their budgets for the past three years combined. They would set a high-watermark for capital spending
China’s top chipmaker has warned that breakaway spending on artificial intelligence (AI) chips is bringing forward years of future demand, raising the risk that some data centers could sit idle. “Companies would love to build 10 years’ worth of data center capacity within one or two years,” Semiconductor Manufacturing International Corp (SMIC, 中芯) cochief executive officer Zhao Haijun (趙海軍) said yesterday on a call with analysts. “As for what exactly these data centers will do, that hasn’t been fully thought through.” Moody’s Ratings projects that AI-related infrastructure investment would exceed US$3 trillion over the next five years, as developers pour eye-watering sums
Bank of America Corp nearly doubled its forecast for the nation’s economic growth this year, adding to a slew of upgrades even after a rip-roaring last year propelled by demand for artificial intelligence (AI). The firm lifted its projection to 8 percent from 4.5 percent on “relentless global demand” for the hardware that Taiwanese companies make, according to a note dated yesterday by analysts including Xiaoqing Pi (皮曉青). Taiwan’s GDP expanded 8.63 percent last year, the fastest pace since 2010. The increase “reflects our sustained optimism over Taiwan’s technology driven expansion and is reinforced by several recent developments,” including a more stable currency,
COLLABORATION: Taiwan and the US could jointly find solutions to weaknesses in supply chain resilience for critical materials, focusing on mining and initial refinement Taiwan is likely to purchase rare earths from the US in the future, and is also in talks with Australia and Canada to strengthen global rare earth supply chain security, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday. Taiwan and the US last month concluded the sixth Economic Prosperity Partnership Dialogue, during which both sides signed a joint statement endorsing the principles of the Pax Silica Declaration, pledging to deepen cooperation in areas including critical minerals. At the time, Kung said the two sides would establish working groups to advance cooperation in areas including artificial intelligence, digital infrastructure, critical materials and
RSS