Gold hit a record high of US$1,235.50 an ounce by midday in Hong Kong yesterday as investors sought a safe haven over deepening concerns about the eurozone debt crisis.
The precious metal closed at US$1,209.00 in Asia on Tuesday, but later climbed as high as US$1,224.82 an ounce in European trading.
Analysts said the commodity was likely to maintain its safe haven role while other markets remained vulnerable.
PHOTO: AFP
It opened at US$1,229.00, just up from a previous record of US$1,226.56 for the metal set on Dec. 3 last year.
“The response of the central banks and the IMF to the southern European mess is almost guaranteed to ensure continued volatility in world markets,” Capital Spreads analyst Simon Denham said.
Investors had on Monday welcomed the EU and IMF aid package worth 750 billion euros (US$1 trillion) to resolve the debt and budget deficit crisis in Europe.
However, the euphoria faded on Tuesday amid resurgent doubts over countries’ ability to reduce their deficits.
“Gold is holding ground ... and with doubts about the effectiveness of the EU/IMF already surfacing, could be poised for a fresh challenge higher to target last year’s all-time high,” analyst James Moore at TheBullionDesk.com said.
The euro continued to be sold as investors became less eager to take risks. The euro was trading at US$1.2624 at 4:50am GMT.
“Investors are removing funds from risky assets into safer haven plays and this is positive for both the US dollar and gold,” City Index analyst Joshua Raymond said. “The EU rescue package has been widely interpreted as not a long-term solution to the deficit woes within the eurozone. With the near-term outlook remaining unstable, investors have sought to transfer their cash into defensive assets.”
The precious metal, whose two main drivers are jewelry and investment buyers, hit record highs last year on the back of inflationary fears and increasing moves by central banks to diversify assets away from the US dollar.
Heightened concerns about Greece have attracted fresh inflows of cash into gold.
“This resilient performance ... is perhaps telling of the skepticism markets still have over the execution of the plans and the tough fiscal challenges that will face some euro area economies,” Barclays Capital analyst Yingxi Yu said. “While markets remain jittery over the effectiveness of the plans, gold is likely to perform relatively well.”
The Legislative Yuan’s Finance Committee yesterday approved proposed amendments to the Amusement Tax Act (娛樂稅法) that would abolish taxes on films, cultural activities and competitive sporting events, retaining the fee only for dance halls and golf courses. The proposed changes would set the maximum tax rate for dance halls and golf courses at 50 and 20 percent respectively, with local governments authorized to suspend the levies. Article 2 of the act says that “amusement tax shall be levied on tickets sold or fees charged by amusement places, facilities or activities” in six categories: “Cinema; professional singing, story-telling, dancing, circus, magic show, acrobatics
Tainan, Taipei and New Taipei City recorded the highest fines nationwide for illegal accommodations in the first quarter of this year, with fines issued in the three cities each exceeding NT$7 million (US$220,639), Tourism Administration data showed. Among them, Taipei had the highest number of illegal short-term rental units, with 410. There were 3,280 legally registered hotels nationwide in the first quarter, down by 14 properties, or 0.43 percent, from a year earlier, likely indicating operators exiting the market, the agency said. However, the number of unregistered properties rose to 1,174, including 314 illegal hotels and 860 illegal short-term rental
INFLATION UP? The IMF said CPI would increase to 1.5 percent this year, while the DGBAS projected it would rise to 1.68 percent, with GDP per capita of US$44,181 The IMF projected Taiwan’s real GDP would grow 5.2 percent this year, up from its 2.1 percent outlook in January, despite fears of global economic disruptions sparked by the US-Iran conflict. Taiwan’s consumer price index (CPI) is projected to increase to 1.5 percent, while unemployment would be 3.4 percent, roughly in line with estimates for Asia as a whole, the international body wrote in its Global Economic Outlook Report published in the US on Monday. The figures are comparatively better than the IMF outlook for the rest of the world, which pegged real GDP growth at 3.1 percent, down from 3.3 percent
ECONOMIC COERCION: Such actions are often inconsistently applied, sometimes resumed, and sometimes just halted, the Presidential Office spokeswoman said The government backs healthy and orderly cross-strait exchanges, but such arrangements should not be made with political conditions attached and never be used as leverage for political maneuvering or partisan agendas, Presidential Office spokeswoman Karen Kuo (郭雅慧) said yesterday. Kuo made the remarks after China earlier in the day announced 10 new “incentive measures” for Taiwan, following a landmark meeting between Chinese President Xi Jinping (習近平) and Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun (鄭麗文) in Beijing on Friday. The measures, unveiled by China’s Xinhua news agency, include plans to resume individual travel by residents of Shanghai and China’s Fujian
RSS