ODJ Bullion Traders Cautiously Upbeat On Tanigaki Gold Remarks
Sydney, Jan. 28 (Dow Jones) - Asian bullion traders have reacted with
cautious optimism to remarks Wednesday afternoon by Japan's finance minister
on the country's desire to re-examine its foreign exchange reserves, including
its gold holdings.
"It's certainly very interesting, and if Japan do go ahead and buy more,
it would have a very, very positive impact on gold," Martin Mayne, associate
director of bullion sales at N M Rothschild and Sons in Sydney, told Dow Jones
Newswires.
Sadakazu Tanigaki said his ministry will carefully consider whether to
change the composition of its US$673.53 billion in forex reserves, including
the weighting of gold in that total.
According to the latest data, Japan has a relatively low amount of bullion
compared with other nations, including the U.S. The market may interpret the
remark as suggesting it will move to diversify its portfolio on concern over
heavy exposure to U.S. dollar-denominated assets.
While traders said the initial reaction in the bullion market was muted,
they credited the news with nudging up the spot price by about US$1 in late
afternoon Asian trade.
Of the four traders reached by Dow Jones Newswires, all said the key
question was whether words translate into action and Japan does indeed go
ahead and buy more bullion. If so, the price of gold stands to rise, they
agreed.
"It's a little unusual," said one Hong Kong trader upon learning the
news, "but presumably good for gold."
At 0650 GMT, spot gold was quoted at US$409.55 a troy ounce, down 57 cents
from Tuesday's late New York price, but up from an intraday low of US$408.30
earlier Wednesday in Asia.
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Nicholas Sinclair, Dow Jones Newswires, 612-8235-2957
nicholas.sinclair@dowjones.com |
