Growing speculation that the International Monetary Fund has moved away from a plan to sell gold to fund debt relief for poorer nations, along with tighter gold lending rates, has helped to add a firmer tone to the gold market.
''That basically is the story. Those two items are perhaps leading to some short-covering and pushing the (gold) price higher,'' said Andrew Montano, director of precious and base metals trading at ScotiaMocotta in Toronto.
Montano said growing fears of higher U.S. inflation and an escalation of hostilities between India and Pakistan could help gold continue its late summer rally.
India, which has fought three wars against neighboring Pakistan in the past 52 years, shot down a Pakistani jet earlier this week over an inlet of the Arabian Sea, killing all 16 people aboard.
The shooting renewed fears that the two countries would escalate a simmering decades-old conflict over control of the northern Indian state of Jammu and Kashmir.
Copyright 1999 Reuters Limited.
Growing speculation that the International Monetary Fund has moved away from a plan to sell gold to fund debt relief for poorer nations, along with tighter gold lending rates, has helped to add a firmer tone to the gold market.
''That basically is the story. Those two items are perhaps leading to some short-covering and pushing the (gold) price higher,'' said Andrew Montano, director of precious and base metals trading at ScotiaMocotta in Toronto.
Montano said growing fears of higher U.S. inflation and an escalation of hostilities between India and Pakistan could help gold continue its late summer rally.
India, which has fought three wars against neighboring Pakistan in the past 52 years, shot down a Pakistani jet earlier this week over an inlet of the Arabian Sea, killing all 16 people aboard.
The shooting renewed fears that the two countries would escalate a simmering decades-old conflict over control of the northern Indian state of Jammu and Kashmir.
Demand for gold, traditionally a hedge against economic and political uncertainty, tends to grow in step with international crises as investors trade vulnerable local currencies for the safe haven of bullion.
India historically is a key market for gold.
Copyright 1999 Reuters Limited
infoseek.go.com
|
