Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Snowshoe who wrote (38865)	9/26/2003 5:30:55 AM
From: maceng2	Read Replies (2) of 74559

Only suckers buy gold... telegraph.co.uk [My view? Make the best use of any dip coming.. I have mid October as the low. Maybe completely wrong of course -g- pb] Gold climbs higher but Bombay bails out By George Trefgarne, Economics Editor (Filed: 26/09/2003) Gold jumped to its highest price for seven years yesterday amid evidence that some of the canniest traders - Indian citizens - are now shunning the precious metal and selling into the rally. Gold has been driven higher by the weak dollar and investors nervous that the recent rise in shares has run its course and interest rates could soon start to rise round the world. Yesterday, it jumped $6.60 to $392 an ounce, its highest since August 1996, as equity markets stalled amid fears about the rising oil price. Several investment banks said they believed the gold price could now top $400. "The technical chart looks very strong still, so from that point of view we could see further speculative buying into gold," said Ingrid Sterby of Barclays Capital. "The next target is $401." The dollar also had another weak day following this week's G-7 statement calling for "flexibility". Against the euro, the dollar slid from $1.1473 to $1.1518 and the pound rose against the US currency by over a cent to $1.6620. Gold is a mandatory wedding gift on the sub-continent and Indian extended families use it to move money around. There are signs that they have stopped buying at current high prices. According to figures from wire services yesterday, imports to India of gold have plummeted: exports to Bombay have slumped to 50kg a day, down from a 400kg-500kg average. Steve Biggs, of SG investment bank, said: "India is the biggest single market for jewellery and Indians are shrewder about the gold price than you would expect." Mr Biggs believes that the gold bull market is running out of steam. He said: "It is mostly hedge funds and other speculators. Many of the external factors, like political uncertainty, which have pushed gold up have diminished." The World Gold Council is planning to launch gold shares tradeable on the London Stock Exchange. Mr Biggs said: "Professionals get out as retail investors get sucked in."

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