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.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
Hon Hai Precision Industry Co (鴻海精密) is reportedly making another pass at Nissan Motor Co, as the Japanese automaker's tie-up with Honda Motor Co falls apart. Nissan shares rose as much as 6 percent after Taiwan’s Central News Agency reported that Hon Hai chairman Young Liu (劉揚偉) instructed former Nissan executive Jun Seki to connect with French carmaker Renault SA, which holds about 36 percent of Nissan’s stock. Hon Hai, the Taiwanese iPhone-maker also known as Foxconn Technology Group (富士康科技集團), was exploring an investment or buyout of Nissan last year, but backed off in December after the Japanese carmaker penned a deal
WASHINGTON POLICY: Tariffs of 10 percent or more and other new costs are tipped to hit shipments of small parcels, cutting export growth by 1.3 percentage points The decision by US President Donald Trump to ban Chinese companies from using a US tariff loophole would hit tens of billions of dollars of trade and reduce China’s economic growth this year, according to new estimates by economists at Nomura Holdings Inc. According to Nomura’s estimates, last year companies such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu shipped US$46 billion of small parcels to the US to take advantage of the rule that allows items with a declared value under US$800 to enter the US tariff-free. Tariffs of 10 percent or more and other new costs would slash such