LONDON: Gold hovered near its lowest in three months yesterday as the dollar traded at a 14-month high following a Federal Reserve study that caused investors to reassess prospects for higher US interest rates. Spot gold was unchanged at $1,255.90 an ounce at 1359 GMT. The metal closed down 1 percent on Monday after hitting its lowest since June 10 at $1,251.24. US gold futures were up $2.30 an ounce at $1,256.60.
“There is a really negative momentum in euro/dollar driving the dollar higher and until we see that stabilise, I don’t think there’s much upside momentum for gold, also because there is no other theme playing at the moment,” Saxo Bank Senior Manager Ole Hansen said.
The dollar was near its July 2013 highs versus a basket of leading currencies, tracking rising US yields after a San Francisco Fed study noted investors are pricing in a lower trajectory for interest rates rises than members of the central bank.
A stronger greenback makes dollar-denominated gold more expensive for holders of foreign currencies, while returns from US bonds are closely watched by the gold market, given that the metal pays no interest.
“Gold is being doing better than a lot of people thought because investors think that the interest rate rise in the US will be slower than the Fed thinks, but it will be more bearish for gold if interest rates actually increase sooner rather than later,” Citi analyst David Wilson said.
CMA CGM unveils 3-way shipping alliance
PARIS/LONDON: French container shipping group CMA CGM has sealed an alliance with two rivals after a failed attempt to partner with bigger peers Maersk and Switzerland’s MSC, vetoed by China earlier this year due to competition concerns.
CMA CGM said on Tuesday it had agreed a route-sharing alliance with China Shipping Container Lines Co Ltd (CSCL) and United Arab Shipping Co (UASC) to be known as Ocean Three in a bid to save costs on key container routes.
The shipping industry has been battling overcapacity linked to a glut of new vessels ordered during a boom period before the global financial crisis of 2007-2009, forcing operators to look for ways of becoming more efficient.
CMA CGM said the new alliance would cover routes between Asia and Europe, as well as Asia and North America. It had planned a service-sharing alliance with Maersk Line and Mediterranean Shipping Co (MSC), but that collapsed in June following opposition from China’s anti-trust authorities.
CMA CGM’s new three-way deal would not need regulatory approval from China or the European Union as the partners would have less than 30 percent market share on Asia-Europe and Asia-Pacific routes, Vice Chairman Rodolphe Saade told Reuters.
However, it would need approval from the U.S. Federal Maritime Commission. “It is going to be possible to implement the agreement very swiftly, with a launch planned for week 49, or early December,” Saade said by telephone.
The alliance would have 20 percent market share for Asia-Europe trade and about 14 percent on Asia-Pacific routes, he said.
Agencies
