NEW YORK: Gold is dusting off its credentials as the go-to commodity in troubled times and its producers are reaping the benefits.
Futures rallied above $1,100 an ounce to a two-month high, after a sell-off in Chinese shares forced the country’s stock exchanges to shut for a second time this week, spurring demand for a haven.
Global markets are facing a crisis and investors need to be very cautious, billionaire George Soros said.
Shares of bullion miners including Barrick Gold Corp. are climbing, even as the 80-member Bloomberg World Mining Index slides to the lowest in more than a decade.
“You are seeing a flight to safety which is causing the price of the metal to improve which is then flowing into the stocks,” Josh Wolfson, an analyst at Dundee Securities Ltd., said by telephone from Toronto.
“Certainly I would expect the price of the metal to outperform. However, outperform doesn’t necessarily imply a positive return.”
After posting three straight annual declines, bullion is topping other commodities this month amid weakness in China’s currency and stock market and geopolitical tensions in the Middle East and North Korea.
Soros told a forum in Colombo, Sri Lanka, that China is struggling to find a new growth model and its currency devaluation is transferring problems to the rest of the world.
The current environment “reminds me of the crisis we had in 2008,” Soros said.
Bullion futures rose 5.5 percent that year, at the start of the global financial crisis, then rallied 24 percent in 2009 and 30 percent the following year.
Gold futures for delivery in February gained 1.5 percent to settle at $1,107.80 at 1:48 p.m. on the Comex in New York, after reaching $1,109.30, the highest for a most-active contract since Nov. 6. Prices are up for a fifth session, the longest run since October.
Most of the 22 raw materials in the Bloomberg Commodity Index are down this year. A gauge of industrial metals fell to the lowest in more than a decade, while oil prices have dropped to the lowest in 12 years.
While the Bloomberg World Mining Index slumped to the lowest since 2004, gold miners are bucking the trend, with Gold Fields Ltd. climbing as much as 8.5 percent in Johannesburg, while Barrick rallied to the highest since July in Toronto.
“It’s really the producers that people are looking at,” Kerry Smith, an analyst at Haywood Securities Inc., said by telephone from Toronto.
“Given that the markets are so choppy and weak, I would have thought it would have been more of a safe haven trade.”
China’s CSI 300 Index tumbled 7.2 percent on Thursday before trading was halted, while the onshore yuan weakened against the dollar to a five-year low after the central bank cut its reference rate by the most since August. China’s regulator called an unscheduled meeting on the stock market, according to a person with direct knowledge of the matter. “It’s all about China and turmoil in the global markets,” said Robin Bhar, a London-based analyst at Societe Generale SA.
“China devaluing the yuan has stoked fear over the weakness of the global economy and that’s good for gold.”
Silver futures also gained on the Comex.
Platinum rose on the New York Mercantile Exchange, while palladium fell.
Gold is turmoil’s beneficiary as Soros recalls 2008 crisis
Gold is turmoil’s beneficiary as Soros recalls 2008 crisis
Saudi ports brace for cargo surge as shipping lines reroute
RIYADH: Preliminary estimates suggest that several global shipping lines could reroute part of their operations to Saudi Arabia’s Red Sea ports, potentially adding 250,000 containers and 70,000 vehicles per month, according to Rayan Qutub, head of the Logistics Council at the Jeddah Chamber of Commerce, in an interview with Al-Eqtisadiah.
“Any disruption in the Strait of Hormuz not only affects maritime traffic in the Arabian Gulf but could also reshape global trade routes,” Qutub said, highlighting the strait’s status as one of the world’s most critical maritime chokepoints for energy and goods transport.
With rising regional tensions, international shipping companies are reassessing their routes, adjusting shipping lines, or exploring alternative sea lanes. This signals that the current challenges extend beyond the Arabian Gulf, impacting the global supply chain as a whole.
Limited impact on US, European shipments
The effects of these developments will not be uniform across trade routes. Qutub noted that goods from China and India, which rely heavily on routes through the Arabian Gulf, are most vulnerable to disruption. In contrast, shipments from Europe and the US typically traverse western maritime routes via the Suez Canal and the Red Sea, making them less susceptible to regional disturbances.
Saudi Arabia’s strategic location, he emphasized, strengthens the resilience of regional trade. The Kingdom operates an integrated network of Red Sea ports — including Jeddah, Rabigh, Yanbu, and Neom — that have benefited from substantial infrastructure upgrades and technological enhancements in recent years, boosting their capacity to absorb increased cargo volumes.
Red Sea bookings
Several major carriers, including MSC, CMA CGM, and Maersk, have already opened bookings to Saudi Red Sea ports, signaling a shift in operational focus to these strategically positioned hubs.
However, Qutub warned that rerouted shipments could increase sailing times. Cargo from Asia, which normally takes 30-45 days, might now require longer voyages via the Cape of Good Hope and the Mediterranean, potentially extending transit to 60-75 days in some cases.
These changes are also reflected in rising shipping costs, driven by longer routes, higher fuel consumption, and increased insurance premiums — a typical response when global trade patterns shift due to geopolitical pressures.
Qutub emphasized that Saudi Arabia’s transport and logistics sector is managing these developments through coordinated government oversight. The Ministry of Transport and Logistics, the Logistics National Committee, and the Logistics Partnership Council recently convened to evaluate the impact on trade and supply chains. Regular weekly meetings have been established to monitor developments and implement solutions to safeguard the stability of supplies and continuity of trade.
He noted that the Kingdom’s logistical readiness is the result of long-term strategic investments, encompassing ports, airports, road networks, rail systems, and logistics zones. Today, Saudi logistics integrates maritime, land, rail, and air transport, enabling a resilient response to global disruptions.
Qutub also highlighted the need for the private sector to continuously review logistics and crisis management strategies, develop alternative plans, and manage strategic stockpiles. Such measures are essential to mitigate temporary fluctuations in global trade and ensure smooth supply chain operations.
