Global gold prices have undergone a downward correction due to sluggish demand, but prices are likely to rally in the middle of next year, a Bank of Taiwan (BOT, 臺灣銀行)) official said yesterday.
Terry Yang (楊天立), deputy general manager of the bank’s precious metals department, made the comment at the launch of the bank’s commemorative gold and silver products to mark the Year of the Pig next year.
Gold prices dropped below US$1,200 per ounce on Friday, marking the sixth straight month of decline, Yang said, describing the fall as the longest in history.
Gold prices declined mainly due to a strong US dollar, which made the US dollar-denominated metal more expensive for holders of other currencies, in addition to surging US bond yields and a robust US stock market drawing investors away from gold, Yang said.
Gold prices have not yet bottomed out, he said, adding that they could drop further to test the US$1,160 mark.
Prices are likely to hover between US$1,160 and US$1,235 until the end of this year, he said.
Yang said he expects the US Federal Reserve to raise interest rates three times next year, which could lead to a downturn in US stocks and prompt gold prices to climb.
Gold prices would not rise until the middle of next year, as it usually takes at least six months to see how the interest rate increases play out, he said.
As the local stock market has hit a bump because of the US-China trade tensions, investors could consider hedging on gold, as many middle-class investors in emerging markets have been doing, Yang said.
As for foreign media reports about palladium prices surging 30 percent to US$1,072.8 per ounce at the end of last month and that they might surpass gold prices, Yang said that demand for palladium increased because it used to be cheaper than platinum, but that the price hike was a result of manipulation and prices could retreat.
DOLLAR CHALLENGE: BRICS countries’ growing share of global GDP threatens the US dollar’s dominance, which some member states seek to displace for world trade US president-elect Donald Trump on Saturday threatened 100 percent tariffs against a bloc of nine nations if they act to undermine the US dollar. His threat was directed at countries in the so-called BRICS alliance, which consists of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates. Turkey, Azerbaijan and Malaysia have applied to become members and several other countries have expressed interest in joining. While the US dollar is by far the most-used currency in global business and has survived past challenges to its preeminence, members of the alliance and other developing nations say they are fed
LIMITED MEASURES: The proposed restrictions on Chinese chip exports are weaker than previously considered, following lobbying by major US firms, sources said US President Joe Biden’s administration is weighing additional curbs on sales of semiconductor equipment and artificial intelligence (AI) memory chips to China that would escalate the US crackdown on Beijing’s tech ambitions, but stop short of some stricter measures previously considered, said sources familiar with the matter. The restrictions could be unveiled as soon as next week, said the sources, who emphasized that the timing and contours of the rules have changed several times, and that nothing is final until they are published. The measures follow months of deliberations by US officials, negotiations with allies in Japan and the Netherlands, and
Foxconn Technology Group (富士康科技集團) yesterday said it expects any impact of new tariffs from US president-elect Donald Trump to hit the company less than its rivals, citing its global manufacturing footprint. Young Liu (劉揚偉), chairman of the contract manufacturer and key Apple Inc supplier, told reporters after a forum in Taipei that it saw the primary impact of any fresh tariffs falling on its clients because its business model is based on contract manufacturing. “Clients may decide to shift production locations, but looking at Foxconn’s global footprint, we are ahead. As a result, the impact on us is likely smaller compared to
TECH COMPETITION: The US restricted sales of two dozen types of manufacturing equipment and three software tools, and blacklisted 140 more Chinese entities US President Joe Biden’s administration unveiled new restrictions on China’s access to vital components for chips and artificial intelligence (AI), escalating a campaign to contain Beijing’s technological ambitions. The US Department of Commerce slapped additional curbs on the sale of high-bandwidth memory (HBM) and chipmaking gear, including that produced by US firms at foreign facilities. It also blacklisted 140 more Chinese entities that it accused of acting on Beijing’s behalf, although it did not name them in an initial statement. Full details on the new sanctions and Entity List additions were to be published later yesterday, a US official said. The US “will
RSS