Gold posted its biggest weekly gain since July 2020 as the war in Ukraine fueled demand for haven assets.
Investors are assessing the economic fallout from Russia’s invasion of its neighbor, which is disrupting flows of energy, grains and metals.
The resulting surge in oil prices has stoked concerns about global growth and inflation risks.
Photo: Bloomberg
Investors have sought out bullion amid the uncertainty, with holdings in exchange-traded funds backed by the metal climbing to the highest since March last year and hedge fund managers boosting their net bullish gold bets to a 19-month high.
Gold prices extended gains on Friday after a US payrolls report showed that wage growth slowed even as hiring boomed last month. The figures might offer some respite from strong inflationary pressures as the US Federal Reserve gets set to raise interest rates.
The metal “is in a sweet spot for the time being as traders certainly want to have exposure to gold given the war situation in Ukraine,” Ava Trade chief market analyst Naeem Aslam said. Still, the jobs data “has confirmed that the Fed has the green light to increase the interest rate and this is likely to keep the gold price on a tight leash.”
Spot gold on Friday rose 1.7 percent to US$1,972.06 an ounce in New York for an about 4.2 percent weekly gain, the biggest since July 2020.
Bullion for April delivery increased 1.6 percent to settle at US$1,966.60 on the Comex.
Spot palladium advanced 8 percent, topping US$3,000 for the first time since May last year on concerns over potential supply disruptions. The metal is up 27 percent this week. Russia produces about 40 percent of the metal mined globally.
Silver and platinum also surged.
Commodity prices soared the most on record this week as Russia’s invasion of Ukraine threatens key supplies of energy, crops and metals that were already tight as major economies emerged from the COVID-19 pandemic.
The Bloomberg Commodity Spot Index, which tracks 23 futures contracts, climbed 13 percent in the week that ended on Friday. That is the most in data going back to 1960.
Russia’s growing isolation has left traders rushing to secure alternatives to the country’s raw materials, sparking fears of prolonged shortages and accelerating global inflation.
The sanctions, coupled with shipping disruptions in the Black Sea, have brought trade deals with the country to a virtual standstill. Russia is a major supplier of crude, natural gas, grains, fertilizers and metals such as aluminum.
Russia and Ukraine also supply more than one-quarter of world wheat exports, one-fifth of corn sales and a similar share of barley shipments, plus about 80 percent of sunflower oil cargoes.
Europe depends on Russia for about one-quarter of its crude oil and one-third of its natural gas. Russian aluminum typically accounts for about 10 percent of US imports.
Huawei Technologies Co (華為) largely omitted mention of its controversial Mate 60 smartphone series at a grand showcase of its new consumer products yesterday. The Shenzhen-based company would increase smartphone production in response to demand, said consumer division chief Richard Yu (余承東), without naming the handset triggering that surge. The Mate 60 Pro earned international notoriety with its advanced made-in-China processor last month, causing concern in Washington about Huawei’s progress toward developing in-house chipmaking capabilities despite US trade curbs. Huawei’s new phones have fired up the company’s sales and were among the top sellers in China in the week before Apple Inc’s
SLUMP: The electronics, machinery and traditional industries posted the largest decline in the past year; overall, sectors showed gains over the previous month Taiwan’s industrial production index decreased 10.53 percent year-on-year to 91.38 last month, falling for a 15th consecutive month on an annual basis, as weak global economic growth continued to weigh on end-market demand and investment momentum, the Ministry of Economic Affairs said on Saturday. The industrial production index gauges output in Taiwan’s four main industries: manufacturing, electricity and gas supply, water supply, and mining and quarrying. Last month’s decline was the smallest contraction since March when the index dropped 16.03 percent from a year earlier. On a monthly basis, the index rose 7.28 percent, marking a second straight month of improvement,
SHOPPING SPREE: The wholesale sector has lagged behind as consumer goods spending has risen, with food and beverage spending hitting almost NT$90 billion Sales in the retail, and food and beverage sectors last month continued to rise, increasing 4.3 percent and 14.3 percent respectively from a year earlier, while sales in the wholesale sector fell for a 10th straight month and declined 5 percent annually, the Ministry of Economic Affairs said on Saturday. The ministry forecast that retail, and food and beverage sales would retain growth momentum this month due to the opening of new shopping malls and the Mid-Autumn Festival. However, the wholesale sector is predicted to see sales drop for another month on an annual basis, as end-market demand remains weak and inventory
Investors were hoping to hear central banks finally signal last week that they were close to finishing raising interest rates in their battle against inflation. Instead, policymakers indicated that high rates are here for a while yet, with more hikes on the cards and few if any cuts in the near future. The US Federal Reserve set the tone on Wednesday when it paused its rate-hike campaign, but caused a stir by leaving the door open to another increase before the end of the year. France’s central bank also unsettled investors by saying that only two cuts were expected next year instead of
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