"The apparent decoupling of gold from dollar/yen came as a welcome
development for some analysts and dealers, who said they had struggled
to see the logic in linking spot gold prices to the weakening" yen.
Gold climbs back to $290.00, defies weak yen
01:21 p.m Jul 30, 1998 Eastern
LONDON, July 30 (Reuters) - Gold climbed back to $290.00 an ounce during
late European trade on Thursday, defying weakness in the Japanese yen
but facing problems ahead nevertheless, dealers and analysts said.
Gold fixed at $290.00 an ounce in the afternoon, up on the mornings
$289.15, after early trade in New York took the metal to test $291.00
resistance.
Spot metal was last ranging at $289.90/$290.40 versus New Yorks
Wednesday close of $289.80/$290.30, ignoring the yens rise to
142.39/2.49 against the dollar, near the top of its range of the last
few days.
The apparent decoupling of gold from dollar/yen came as a welcome
development for some analysts and dealers, who said they had struggled
to see the logic in linking spot gold prices to the weakening yen.
I am glad to say its decoupling. I have never worked out why it should
have been coupled, said Ted Arnold, first vice president at Merrill
Lynch in London.
Those eyeing dollar/yen as a pointer to gold prices have argued that it
provided a rough-and-ready indicator for gold demand not only in Japan
but also throughout Southeast Asia, where currency weakness has meant
gold in local terms is now much pricier than a year previously.
They said the weakening yen depressed local demand and marked spot gold
prices lower accordingly.
People seemed to be following dollar/yen but why oh why beats me, said
one London dealer.
Arnold said that regardless of dollar/yens direction, gold had plenty of
problems of its own.
The only thing that I would say about the gold market is that theres a
hell of a lot of it about for gold loans and forward sales. Physical
demand is poor and any report Ive read about mines shows that production
is up, he said.
The surprising thing is that gold has managed to hold up. My philosophy
remains the same -- to sell forward into the rallies and watch it come
lower, he added.
Among the miners reporting increased production during recent days have
been African gold mining group Ashanti Goldfields Co Ltd, one third
owned by Britains Lonrho Plc (LRHO.L) and 20 percent by the Ghanaian
government, Australias Great Central (GCM.AX) and MIM Holdings Ltd
(MIM.AX), and South Africas second largest producer, Gold Fields
(GFLJ.J).
Silver was last steady after its earlier losses, trading at $5.54/$5.57,
four cents down on New Yorks Wednesday close.
Platinum and palladium were dull, the former trading unchanged versus
its previous New York close at $377.50/$379.50 and the latter down just
40 cents at $296.50/$306.50.
((Patrick Chalmers, London Newsroom +44 171 542 8057.
london.commodities.desk+reuters.com))
Copyright 1998 Reuters Limited. All rights |
