Industrial metals plunged and gold rallied as the emergence of a fast-spreading and highly mutated SARS-CoV-2 strain sparked a sell-off across financial markets.
Base metals, including copper and aluminum, fell more than 3 percent in London as investors weighed the risk that the new variant identified in South Africa might spur fresh outbreaks and derail growth in the world’s leading industrial economies.
Scientists say it carries a high number of mutations that could make it more effective at evading existing vaccines.
The new strain creates fresh risks to the outlook for metals demand, imperiling a recent rebound in prices driven by chronic supply constraints that have led to sharp drawdowns in global inventories.
Gold pared recent losses as investors across financial markets questioned whether new outbreaks could complicate central banks’ efforts to withdraw ultra-loose monetary policies.
On Friday, traders rushed to cut back their bets on rate hikes, while safe-haven currencies rallied.
“Metals prices had been picking up on the back of the focus on fundamental physical tightness,” Amalgamated Metal Trading head of research Tom Mulqueen said by telephone. “Now this new virus variant has emerged and the market is in a flight to safety.”
Copper fell as much as 3.5 percent to US$9,459 a ton and traded at US$9,467.50 on the London Metal Exchange, as all base metals traded lower.
Spot gold rose 1.2 percent to US$1,809.55 an ounce, while silver traded little changed, and platinum and palladium declined.
Gold for December delivery on Friday rose US$1.20 to US$1,785.50 an ounce, down 3.6 percent weekly.
“Uncertainty about the possible consequences of the new virus variant clearly reminds the markets that this pandemic is not over yet,” Alexander Zumpfe, a senior trader at refiner Heraeus Metals Germany GmbH & Co, said in a note. “The gold price should remain supported in this environment and the topic of tapering should take a back seat for the time being.”
Iron ore futures also plunged more than 6 percent in Singapore, paring a weekly gain as caution crept back into the market.
Aside from the risk posed by the new variant, there are other, ongoing ones in China’s property sector, while local governments have struggled to find good projects to spend their money on.
Additional reporting by AP
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain Apple Inc’s primary chip manufacturing partner despite reports that Apple could shift some orders to Intel Corp, industry experts said yesterday. The comments came after The Wall Street Journal reported on Friday that Apple and Intel had reached a preliminary agreement following more than a year of negotiations for Intel to manufacture some chips for Apple devices. Taiwan Institute of Economic Research (台灣經濟研究院) economist Arisa Liu (劉佩真) said TSMC’s advanced packaging technologies, including integrated fan-out and chip-on-wafer-on-substrate, remain critical to the performance of Apple’s A-series and M-series chips. She said Intel and Samsung
POWER BUILDUP: Powered by Nvidia’s B200 Blackwell chips, the data center would support MediaTek’s computing power demand and business growth, the company said Smartphone chip designer MediaTek Inc (聯發科) yesterday launched a new artificial intelligence (AI) data center with a maximum capacity of 45 megawatts to meet its rising demand for computing power required to develop new advanced chips for AI applications. The company has completed the first-phase computing power buildup at the data center in Miaoli County’s Tongluo Township (銅鑼), providing 15 megawatts of capacity to support its research and development (R&D) capabilities, despite an industrywide shortage of key components, MediaTek said. Supply constraints have plagued a wide range of key components, including memory chips, solid-state drives, power supply units and central
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
RSS