Gold is poised to cap the biggest annual advance in a decade after a tumultuous year, with gains last month aided by the US dollar’s decline to the lowest level since April 2018.
Silver has surged almost 50 percent last year.
Bullion in August last year hit a record as investors sought haven assets amid the COVID-19 pandemic.
The surge was buttressed by unprecedented waves of stimulus, including from the US Federal Reserve, which fanned concerns of currency debasement.
Holdings in bullion-backed exchange-traded funds set an all-time high in October last year, although they have since ebbed with the roll-out of COVID-19 vaccines.
Gold, which does not typically offer interest, has benefited as the US central bank cut interest rates to near zero and bought billions of US dollars of bonds every month.
That has helped to drive real interest rates — which reflect expectations for inflation — well below zero.
Led by Fed Chairman Jerome Powell, the US central bank has signaled that its ultra-easy policy would last throughout this year.
“Gold’s main drivers — weaker US dollar and low real interest rates — are likely to provide support” even as vaccines are distributed around the world, Vasu Menon, executive director of investment strategy at Singapore-based Oversea-Chinese Banking Corp, said yesterday in an e-mail.
With the lower-for-longer Fed, “it is too early to throw in the towel on gold,” he said.
Bullion for immediate delivery was 0.3 percent lower at US$1,888.99 per ounce at 12:55pm yesterday in Singapore. That is up 6.3 percent month-on-month and 24.5 percent higher year-on-year, poised for the biggest full-year advance since 2010.
The Bloomberg Dollar Spot Index is heading for a third straight quarterly loss.
Ahead of the new year, some banks have signaled that the traditional haven might now struggle to extend its gains. Gold and other precious metals would likely come under pressure this year as financial markets normalize and the yield curve steepens, Morgan Stanley said in a note last month.
Others have struck a more positive tone.
While bullion’s rally has been blunted by COVID-19 vaccine progress, there is still support from monetary and fiscal policies, HSBC Securities (USA) Inc said.
The incoming administration of US president-elect Joe Biden would likely be gold-positive from a fiscal-spending perspective, it said in a note on Dec. 9.
Spot silver traded at US$26.3869 per ounce, up 48 percent year-on-year. Palladium is on course for a fifth consecutive annual gain, with a rise of more than 20 percent last year.
Platinum has climbed 10 percent year-on-year.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, has decided to slow down its 3-nanometer chip production as Intel Corp, one of its major customers, plans to push back the launch of its new Meteor Lake tGPU chipsets to the end of next year, market researcher TrendForce Corp (集邦科技) said yesterday. That means Intel has canceled almost all of the 3-nanometer capacity booked for next year, with only a small amount of wafer input remaining for engineering verification, the Taipei-based researcher said in a report. Based on Intel’s original schedule, TSMC was to start producing the new chipsets in
Aptera Motors Inc cofounder Chris Anthony, left, and Formosa AdvEnergy Technology Corp chairwoman Sandy Wang pose for a photograph next to an Aptera three-wheeled solar electric vehicle at a news conference in Taipei yesterday. Formosa AdvEnergy yesterday signed an agreement to supply batteries for Aptera Motors’ solar electric vehicles. Formosa Smart Energy Tech Corp, another unit of Formosa Plastics Group, will also jointly develop a new generation of lithium iron phosphate batteries with Aptera Motors, the companies said.
INDUSTRY CLUSTER: The company was invited to a groundbreaking ceremony for an industrial park in the city, where officials hope to establish a semiconductor hub Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said that the construction of a planned 12-inch wafer plant in Kaohsiung would start later this year. The chipmaker’s comments came after the Kaohsiung City Government invited the company to attend a groundbreaking ceremony on Sunday at the Nanzih Technology Industrial Park (楠梓科技產業園區), where the new plant is to be built. The park would sit on the former site of a naphtha cracking plant owned by state-owned oil refiner CPC Corp, Taiwan (台灣中油). Kaohsiung Mayor Chen Chi-mai (陳其邁) yesterday did not confirm whether work on the Nanzih industrial park would begin on Sunday, but said it
‘NO NEED TO WORRY’: The central bank governor said foreign selling on the TAIEX is normal for this time of year and that the nation has ample forex reserves Taiwan would emerge unscathed from China’s retaliatory actions to protest US House of Representatives Speaker Nancy Pelosi’s visit to Taipei, top monetary and financial officials said yesterday. Central bank Governor Yang Chin-long (楊金龍) shrugged off unease over potential instability in the foreign exchange and stock markets after foreign portfolio funds trimmed their holdings of local shares for two straight days amid Beijing’s threats of retaliation. “There is no need to worry,” Yang said on the sidelines of an event to celebrate the first anniversary of the opening of Central American Bank for Economic Integration’s (CABEI) Taipei office and the 30th anniversary of