Gold posted a second straight gain as investors weighed the impacts of new US sanctions on Russia and the outlook for economic growth.
The US is working with NATO allies to prepare for the possibility of Russia deploying biological, chemical or nuclear weapons as part of the Ukraine war, US National Security Adviser Jake Sullivan said on Thursday.
Meanwhile, a government report showed orders placed with US factories for business equipment unexpectedly declined last month for the first time in a year.
Photo: Bloomberg
The war in Ukraine and ensuing sanctions have pushed up commodity prices and fueled inflation, resulting in faster monetary tightening from some central banks while also threatening growth.
The US Federal Reserve’s more hawkish tone and higher US bond yields are weighing on non-interest bearing bullion, but gold is also benefiting from its appeal as a store of value.
Spot gold on Friday rose to US$1,958.32 an ounce in New York, up 1.3 percent for the week.
Silver and platinum advanced, and palladium was little changed.
Elevated inflation prints “and geopolitical uncertainty should drive gold modestly higher,” analysts at Morgan Stanley wrote in a note, forecasting US$2,000 an ounce in the second quarter of this year.
“We expect gold to come under pressure later in the year as central banks raise rates to combat inflation,” they said.
NICKEL
Nickel prices swung sharply in barely there volumes at the end of a tumultuous week on the London Metal Exchange (LME), in which futures spent most trading sessions locked either limit-up or limit-down.
Since reopening on March 16, Friday was only the second day that the nickel market remained within the LME’s new daily price limits as it seeks to reset after a massive short squeeze sent prices spiking.
However, the extreme lack of liquidity in the market has left it exposed to erratic moves — prices rallied more than 9 percent and then fell as much as 7.4 percent in just the first 45 minutes of trading.
The ongoing turmoil in the market is raising questions about the role and future of the LME as the place where benchmark prices are set for some of the world’s most important industrial metals.
The exchange has come under furious criticism for its handling of this month’s nickel crisis. Traders remain wary of the threat of another squeeze — there are still large short positions in the market that would have come under growing pressure during a two-day limit-up spike earlier in the week.
The LME suspended trading for a week and canceled billions of dollars of transactions earlier this month as it sought to rein in the runaway short-squeeze centered on China’s Tsingshan Holding Group Co (青山控股).
Trading has been effectively frozen for much of the time since the market reopened last week, with prices falling by a daily limit for several days. While the market saw some real trading on Tuesday, the price surged limit-up on Wednesday and Thursday.
Prices are still up 45 percent this month, set for the biggest gain since 1988, and the LME on Friday said it would nearly double the size of its default fund in response to the recent volatility.
Nickel was trading 5.5 percent lower at US$35,175 a ton on Friday, having earlier slumped by US$6,200 from its intraday high, in the second-biggest intraday swing on record, excluding trading on March 8.
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said second-quarter revenue is expected to surpass the first quarter, which rose 30 percent year-on-year to NT$118.92 billion (US$3.71 billion). Revenue this quarter is likely to grow, as US clients have front-loaded orders ahead of US President Donald Trump’s planned tariffs on Taiwanese goods, Delta chairman Ping Cheng (鄭平) said at an earnings conference in Taipei, referring to the 90-day pause in tariff implementation Trump announced on April 9. While situations in the third and fourth quarters remain unclear, “We will not halt our long-term deployments and do not plan to
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
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