Gold Falls as Computers Negotiate New Year, Giving Shares More Allure
By Rajat Bhattacharya
Gold Falls as Y2K Bug-Free Trading Triggers Selling (Update3)
(More comments from traders, updates prices)
Sydney, Jan. 4 (Bloomberg) -- Gold fell as much as 2.2
percent after global financial markets reported no Y2K computer
problems, prompting investors to sell the precious metal and
invest in stocks.
``People are selling out on the back of Y2K being a non-
event,' said Peter Upton, a gold trader at Dresdner Bank in
Sydney, one of six bullion banks in Australia. Some investors
bought gold last week as a ``safe haven' to park their savings,
but then sold after financial markets said they were safe from
the Y2k bug, he said.
Almost all financial markets reported glitch-free operations
on the first day of trading in the New Year. Around Asia, stock
markets in Japan, Taiwan, Korea and India surged, as computers
successfully negotiated the year 2000, allowing investors to
focus on the region's economic growth.
Gold for immediate delivery fell as much as $6.25 per ounce,
or 2.2 percent, to $282.75 in Asian trading, its lowest since
Dec. 21. It was recently trading $5.125 lower at $283.875 per
ounce.
Gold for February delivery fell as much as 1.8 percent to
$284.3 per ounce on the Comex division of the New York Mercantile
Exchange. It was recently trading $4.7, or 1.6 percent, lower at
$284.90.
Gold rose more than 3 percent in the last three weeks of
December as investors bought the metal as a hedge against
possible turmoil on financial markets because of the Y2K problem,
which can cause computers to malfunction by reading the year 2000
as 1900.
Gold may fall to $280 per ounce after trading starts in
Europe today, said Duncan Cruickshank, associate director in
charge of metals trading at Barclays Capital in Sydney.
``I see it going till $280, I'm not looking at a wholesale
collapse,' he said.
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