Gold hits four-week low on firmer dollar amid US rate hike forecasts

An employee sorts gold bars in this file photo. (Reuters)
Updated 08 February 2018
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Gold hits four-week low on firmer dollar amid US rate hike forecasts

LONDON: Gold prices dropped for a third straight session on Thursday and hit a fresh four-week low as investors liquidated their long positions on a firmer dollar, while expectations of more US rate hikes this year also weighed on the market.
Spot gold was down 0.4 percent at $1,312.41 per ounce, after hitting its lowest since Jan. 10 at $1,309.51 earlier in the session. US gold futures for April delivery were nearly flat at $1,314.50 per ounce.
The dollar rose on Wednesday, marking its biggest one-day gain in more than three months against a basket of currencies. It was steady at 90.269 on Thursday.
“There was consistent selling on Comex ... and offers above the $1,320 cash level were enough to prevent an advance,” said MKS PAMP Group trader Alex Thorndike.
“Spot gold slowly began to work its way lower with ongoing liquidation seen from managed money and leveraged clients — those who were still buying aggressively above $1,340.”
Asian shares flirted with six-week lows on Thursday, while US stocks finished lower on Wednesday, losing ground late in the session as a jump in Treasury yields kept investor nervousness high. The US Federal Reserve will stick to its plan for “steady, gradual” interest rate increases, San Francisco Federal Reserve Bank President John Williams said on Wednesday despite market gyrations and strong data on US wage growth that has bond traders pricing in faster rising inflation.
Hikes in interest rates lead to higher bond yields and dampen the demand for non-yielding gold. The yellow metal is also used as a hedge against inflation.
“The shifting Fed narrative that is gathering hawkish following could be the most significant thorn in the gold bulls side,” said Stephen Innes, head of trading APAC at OANDA. Spot gold is expected to fall more to $1,301 as it has pierced below a support at $1,316 per ounce, according to Reuters technical analyst Wang Tao. Holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), dropped 0.29 percent to 826.90 tons on Wednesday from 829.27 tons on Tuesday. Holdings fell for a second straight session after they marked their worst one-day drop since December 2016 on Tuesday.
“The heavy falls in equities appear to have impacted ETF investors,” ANZ analysts said in a note.
Among other precious metals, silver was little changed at $16.37 per ounce after touching its lowest since Dec. 22 at $16.22 earlier in the session. Platinum declined 0.2 percent to $977.50 per ounce, after touching its lowest since Jan. 11 on Wednesday. Palladium fell 0.3 percent to $981.55 per ounce. Earlier in the session, it hit $977.22, its lowest since Nov. 15.


China’s Huawei books record sales in its smartphone business

Updated 24 January 2019
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China’s Huawei books record sales in its smartphone business

  • Huawei last month flagged that total revenue in 2018 rose 21 percent to $109 billion without providing a breakdown of segment performance
  • Some countries such as the United States and its allies, including Australia and New Zealand, have restricted Huawei’s access to their markets

BEIJING/HONG KONG: China’s Huawei Technologies Co. Ltd. said on Thursday its consumer business sales exceeded a record $52 billion in 2018, on strong demand for its premium smartphones, even as it continued to face heightened global scrutiny of its activities.
The jump of around 50 percent in the technology giant’s consumer business revenue saw that unit replace its carrier business as its largest segment by sales, Richard Yu, the head of the consumer division, said in Beijing.
Huawei last month flagged that total revenue in 2018 rose 21 percent to $109 billion without providing a breakdown of segment performance.
Huawei on Thursday also unveiled its first 5G base station chipset called Tiangang as well as its 5G modem Balong 5000, which it described as the most powerful 5G modem in the world.
Yu said it was the world’s first 5G modem that fully supports both Non-Standalone (NSA) and Standalone (SA) 5G network architecture.
The firm has been using its chipsets in its high-end phones and server products, though it has said it has no intention to become a standalone semiconductor vendor that competes against the likes of Intel Corp. and Qualcomm Inc.
Huawei, the world’s biggest producer of telecommunications equipment, has been facing intense scrutiny in the past year over its relationship with China’s government and US-led allegations that its devices could be used by Beijing for spying. The firm has repeatedly denied the accusations.
Some countries such as the United States and its allies, including Australia and New Zealand, have restricted Huawei’s access to their markets.
The firm’s finance chief Sabrina Meng Wanzhou, also daughter of its founder, was arrested in Canada last month at the behest of the United States.
She has been released on bail but is still in Canada as the United States pursues her extradition on allegations she defrauded banks with Iran-related sanctions. Huawei has denied wrongdoing.