(Kitco News) The gold market continues to benefit from its safe-haven appeal as Russia-Ukraine tensions confuse and add fear to the marketplace.
There was a lot of confusion over sarcastic comments made by Ukraine President Volodymyr Zelenskiy about February 16 being identified as the day Russia plans to attack Ukraine.
In a video message on Monday, Zelenskiy declared this upcoming Wednesday a “day of unity,” instead of what many in Western media cite as a possible start of a Russian invasion.
“They tell us Feb. 16 will be the day of the attack. We will make it a day of unity,” Zelenskiy said. “They are trying to frighten us by yet again naming a date for the start of military action,” Zelenskiy said. “On that day, we will hang our national flags, wear yellow and blue banners, and show the whole world our unity.”
The reference of February 16 added fear to the markets on Monday afternoon. To clarify the comment, Zelenskiy spokesman Sergii Nykyforov said that the comment was taken at face value.
“The president referred to a date that was spread by the media,” Nykyforov told NBC News.
In the Monday’s video message Ukraine’s leader also called on politicians and business leaders who had fled the country to return within 24 hours in a show of unity.
“It is your direct duty in such a situation to be with us, with the Ukrainian people. I suggest that you return to your homeland within 24 hours and stand shoulder to shoulder with the Ukrainian army, our diplomacy, and our people,” Zelenskiy said.
On Monday, the U.S. announced that it is closing its embassy in the country’s capital Kyiv and “temporarily relocating” its operations to Lviv, a city in western Ukraine near the Polish border.
In response, the U.S. stock indexes fell while gold prices tested the $1,870 an ounce level. The Dow Jones Industrial Average was down 0.62% during afternoon trading, the S&P 500 fell 0.6%, and the Nasdaq Composite edged down 0.1%.
April Comex gold futures were trading at $1,872.30, up $30.20 on the day, at the time of writing.
The Russia-Ukraine conflict is what will drive gold prices this week, with the market looking to make more gains in case of further escalation, according to analysts.
“The upswing is attributable to a warning from U.S. intelligence services that a Russian invasion of Ukraine is imminent. Consequently, gold was in considerable demand as a safe haven. This need for safety of investors was also evident in the ETFs: Bloomberg reports that Friday saw inflows of nearly 6 tons,” said Commerzbank analyst Daniel Briesemann. “If the situation there does indeed escalate, the gold price is initially likely to climb further.”
The geopolitical tensions could take the gold market all the way to $1,900, said OANDA senior market analyst Edward Moya. “The $1880 level should prove to be key resistance for gold … bullish momentum could take prices to the $1900 level,” Moya said.
Fears of a possible Russian invasion of Ukraine were renewed on Friday when the U.S. said that Russia could launch military action in Ukraine “any day.”
Russia has continuously denied reports that it is planning to attack Ukraine. Over the weekend, Kremlin spokesman Dmitry Peskov accused the West of “hysteria.”
“This hysteria is being intentionally whipped up,” Peskov said on Sunday. “We are being accused of some sort of unusual military activity on our territory by those who brought in their troops from across the ocean. This neither exactly logical nor exactly polite.”
Another layer of uncertainty was introduced by St. Louis Federal Reserve President James Bullard on Monday, who said in a hawkish comment that he would support a faster rate hike timeline that would see a full percentage point increase by July 1.
“It was really October, November, December, January that called into question any idea that this inflation was naturally going to moderate in any reasonable time frame without the Fed taking action,” said Bullard.
The big item on the agenda this week is the January FOMC meeting minutes. Markets will be looking for clues in terms of how aggressive the U.S. central bank could allow itself to be.
” The minutes … will help to clarify whether officials would consider a 50bp hike,” said Capital Economics chief North America economist Paul Ashworth.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
