WSJ -- SPDR Gold Trust now has 935.09 metric tons of gold ..............................
Jon.
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FEBRUARY 12, 2009, 8:02 P.M. ET
Gold Prices Climb Near $950
By MOMING ZHOU
NEW YORK -- Gold futures rose Thursday for a third straight session, ending at the highest level in seven months near $950 an ounce, as investors who remain skeptical toward U.S. economic-rescue plans continued to buy the metal for its safe-haven appeal.
Stocks and crude-oil futures, meanwhile, lost ground despite better-than-expected U.S. retail sales data for January. The market reaction suggested investors lack confidence in the economy.
Many analysts project further gains for gold amid the economic troubles. Holdings in the largest gold exchange-traded fund hit a new record above 900 tons Wednesday, according to latest data.
Gold for February delivery ended up $4.70, or 0.5%, at $948.50 an ounce on the Comex division of the New York Mercantile Exchange, the highest closing level for a front-month contract since July. It has rallied $56.10, or 6.2%, over the three sessions since Monday.
Trading more actively, the April contract rose modestly to close at $949.20 an ounce.
Commodities traders have been fixated on developments in Washington this week. U.S. lawmakers continued to hammer out details of a compromise on a massive economic stimulus plan on Thursday, putting the finishing touches on one of the largest rescue programs since the New Deal. They aim for a vote before the weekend.
The markets, however, remain skeptical of the government's plans. Energy traders on Thursday sold crude oil, considered a barometer of economic growth, for a fifth straight session.
U.S. stocks also fell, with the Dow Jones Industrial Average down more than 160 points recently. Investors were also concerned about the ongoing problem of placing a value on financial institutions' toxic assets.
Investors' skepticism sparked flight-to-quality buying, leaving U.S. Treasurys and gold as the main beneficiaries, said analysts at Action Economics. The U.S. dollar rose against its major rivals, also buoyed by safe-haven buying.
Gold Above $1,000?
Some analysts predict gold prices will surpass $1,000 an ounce later this year, in line with expectations that gold will continue in demand as a safe haven against economic troubles.
"The prospects for $1,200 to $1,300 gold by end of the third quarter remain underpinned by a set of cogent fundamental variables involving currencies, interest rates and the global economy," said Ashraf Laidi, chief market strategist at London-based CMC Markets.
Holdings in SPDR Gold Shares, the largest exchange-traded fund backed by gold, reached 935.09 tons, climbing above 900 tons for the first time. That's up more than 40 tons from a day ago, and nearly 150 tons higher than a month ago. The SPDR Gold Trust rose 1.3% to $93.49.
[note from Jon : (as I have explained to my children) ... if a whole bunch of (stupid (?)) people all decide to buy and buy and buy the same thing (silver in 1979 / early 1980, Internet stocks in 1999 / early 2000, real estate in whatever the exact time period was), then ... yes, the price of that thing will go up for a while.
But, if it makes no sense, the price of that thing will inevitably crash.]
U.S. economic news was mixed Thursday. Retailers rang up their largest increase in sales in more than a year in January, rebounding after six straight months of sharp declines. But economists attributed the gain in part to seasonal factors, while also noting that figures for the previous two months were revised lower.
First-time claims for state unemployment benefits dipped last week, although continuing claims reached a record high.
In the housing sector, foreclosure notices on U.S. properties in January rose 18% from a year earlier.
In other metals trading, March copper fell slightly to $1.5345 a pound, while March silver also eased to $13.51 an ounce. March palladium rose to $216.50 an ounce, and the April contract for sister metal platinum sank 0.3% to $1,077.90 an ounce.
Shares of Barrick Gold Corp., the world's largest gold mining company, gained 1.1% to $39, while Goldcorp Inc. added 0.3% to $31.60, and South Africa's Gold Fields Ltd. fell 1.8% to $11.33.
The Amex Gold Bugs Index, which tracks the share prices of major gold companies, slid 0.4% to 316.27. The iShares Gold Trust ETF edged up 0.4% to $92.78, while the iShares Silver Trust ETF lost 0.5% to $13.28.
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