06/06/2026

BIZ & FINANCE SATURDAY | JUNE 6, 2026

FOLLOW

ON TWITTER Malaysian Paper

14

@thesundaily

Will history or new drivers decide gold’s fate? S HOULD gold investors be disap pointed that the precious metal has failed to kick on from its January record high above US$5,500 (RM22,056) an ounce, or should they be relieved the pullback hasn’t been more severe?

Anthropic calls for pause in global AI development NEW YORK: Artificial intelligence (AI) company Anthropic suggested Thursday a global pause on building the most powerful AI systems as the latest models are beginning to show signs they could escape human control. The San Francisco-based company, which makes the Claude family of AI models, said in a report that a worldwide slowdown in cutting edge AI development would “likely be a good thing” – but warned that if only one company stopped, rivals would simply race ahead. “We believe it would be good for the world to have the option to slow or temporarily pause frontier AI development to enable societal structures and alignment research to keep up with the advance of the technology,“ it said. Getting a real pause to work would mean multiple major AI companies in multiple countries – most notably the US and China – all agreeing to stop at the same time, under rules everyone could actually verify, Anthropic said. That idea may prove somewhat unpopular with the likes of Elon Musk, as the hotly anticipated stock market debut of his SpaceX company – which owns his artificial intelligence venture xAI – is expected to make him the world’s first trillionaire. “Without a global coordination mechanism, companies and governments will have to make difficult decisions about safety while under competitive and geopolitical pressures,“ Anthropic said. The company has faced pushback from others in the industry – and officials in the White House – who say its focus on worst-case scenarios overstates the risks and amounts to a strategy for slowing rivals under the cover of safety concerns. Still, the White House has acknowledged the power of the company’s Mythos model – which has not been made available to the general public due to its cybersecurity capabilities and is currently deployed only to a small number of vetted organisations. The proposal would face an uphill battle in Washington and Silicon Valley, where US officials and tech executives have repeatedly argued that any slowdown in AI development risks handing China a decisive strategic edge in what many see as the defining technology race of the century. US President Donald Trump, however, said he discussed the possibility of cooperating with China on AI safety issues during his recent visit to Beijing. Trump also signed an executive order this week that allows the government 30 days to conduct a preliminary review of the most powerful US AI models before their release. Anthropic compared the problem to nuclear arms control treaties, but said it would be even harder to get a handle on since AI training is far easier to hide than a missile silo, and the temptation to quietly keep going would be enormous. “You want the option to be able to take your foot off the gas and put your foot on the brake,“ Anthropic’s co-founder Jack Clark told Britain’s BBC Newsnight on Thursday. “Right now, it’s like the AI industry has a gas pedal, but it doesn’t have a brake pedal.” The company said it plans to bring together government officials, scientists, advocacy groups and competing AI firms in coming months to figure out how such a system could work. The call for coordination comes alongside internal data showing that AI is already dramatically speeding up the development of AI itself, Anthropic said. That acceleration creates a feedback loop that Anthropic warned could eventually lead to what researchers call “recursive self-improvement.” That’s the idea of an AI system that becomes capable of essentially teaching itself to get smarter, without much human help. – AFP

The price history over the past two decades suggests that strong rallies, such as the one from September 2022 to January 2026 when gold gained 245%, are followed by substantial declines, even if the bulk of the gains are consolidated. In the rally from a low of US$697.45 an ounce in October 2008 to a then-record-high of US$1,884.40 in September 2011, gold gained 170%. It then declined by 37% to a low of US$1,191.35 by August 2018. From that low it jumped 74% to a high of US$2,072.49 an ounce by August 2020, before retreating 22% to US$1,620.20 by September 2022. It’s worth noting that the bigger the increase in prices, the bigger the subsequent decline, and a further point is that the rallies tend to happen over shorter time spans than the retreats. From the September 2022 low gold went on a tear, rising to an all-time high of US$5,594.82 an ounce on Jan 29. Since then it has softened by 20% to end at US$4,473.89 an ounce on Thursday. Based on the previous rally and retreat pattern there would seem to be the possibility of a bigger decline in coming months and even years before the uptrend resumes. But this assumes that the same dynamics that drove the previous rallies and periods of consolidation still exist today. There is an obvious risk to saying “this time it’s different,” and markets are littered with examples of this kind of thinking ultimately proving incorrect. That said, the current rally was largely achieved by a combination of bullish factors, and it was unusual insofar as all of them were pulling in the same direction at the same time. Three main factors stand out, namely increased central bank purchases, strong retail demand by the top two buyers China and India, and support from investors in what can broadly be described as the fear trade. This includes fear of higher inflation, fear of adverse geopolitical developments, and since the return of Donald Trump to the US presidency, fear that his policies will undermine the status of the US dollar as the global reserve currency, and with that the associated loss of US economic hegemony. However, in recent months central bank buying has moderated, as has consumer demand in China and India. The latest World Gold Council quarterly

Gold’s biggest challenge may no longer be demand, but shifting expectations for interest rates and geopolitics. – UNSPLASH PIX

as Microsoft and OpenAI under US-Japan security ties, it has also backed domestic players including SoftBank, Sakura Internet and chipmakers to expand homegrown AI models and computing capacity. Japan’s push to keep pace with the global AI race reflects a broader anxiety among governments worldwide, fearful of falling behind and becoming ever more dependent on foreign technology. Earlier this week, the European Union unveiled a new technology sovereignty package to boost domestic cloud, AI and semiconductor industries and cut reliance on US tech firms. – Reuters 1,315.6 tons in the same period last year. This makes the relatively modest pullback in gold prices seen since the January high seem like a good performance. The problem for gold investors is the price is currently being driven mostly by monetary policy expectations rather than the usual factors. The inverse correlation in recent weeks with crude oil is an example of this. When crude oil prices rise amid the ongoing conflict between the US and Iran, then gold eases. Conversely when oil prices slip on hopes that a peace deal is imminent, then gold recovers somewhat. The oil price is driving US interest rate expectations, with higher prices opening the possibility of higher rates, but also eliminating the hope for cuts. Lower oil prices lift hopes that rates will fall, and lower rates tend to support non yielding assets such as gold. Ultimately this makes gold as much a hostage to developments in the Iran war as other assets. The views expressed here are those of Clyde Russell, a columnist for Reuters.

report showed central banks bought 243.7 metric tons of gold in the first quarter of this year, up 3% from the same quarter in 2025. However, purchases have been levelling off in a range either side of 200 tons per quarter since the start of 2025, and are well below the highs from mid-2022 to the end of 2024, when buying exceeded 300 tons a quarter for five quarters and only once dipped below 200 tons. Jewellery demand in China was 85.2 tons in the first quarter, down 31% from the same period in 2025, while India slipped 19% to 66.1 tons. Global jewellery demand dropped 25% to 260.2 tons in the first quarter of this year, according to council data. Higher gold prices have acted as a brake on consumer demand, and India’s government has moved to increase taxes on gold imports in a bid to lower purchases and thereby ease balance-of-payments pressures. Investment flows into gold exchange traded funds have also dropped, with inflows of 62 tons in the first quarter being down 73% from the same quarter in 2025. Overall, total gold demand dropped by 9% in the first quarter of 2026 to 1,195.9 tons from

Japan risks becoming an ‘AI colony’, minister warns TOKYO: Japan could fall prey to a new form of colonialism in the AI era if it fails to keep pace with the technology’s rapid development, the country’s digital minister warned yesterday. “I hope many Japanese people understand that we need to press ahead with AI development moving so fast, Japan can’t afford to fall behind,“ he told a press briefing. Some opposition parties have expressed concerns about the government-drafted bill, citing data breach risks.

The bill, which passed the lower house of parliament last week, is now being debated in the upper house. Japan’s government has ramped up efforts, from subsidies and targeted procurement to legal changes, to support domestic AI development amid an intensifying global tech race led by the US and China. While Japan has courted investment and greater access to technology from US companies such

development, or we’ll end up becoming an ‘AI colony’,“ Digital Minister Hisashi Matsumoto said. Matsumoto raised the warning as he defended a bill to amend Japan’s personal data protection law to allow AI developers to train models with data such as medical and criminal records without the individuals’ consent. “The point of this change is that, with AI