"If the New York stock market isn't attractive, investors are going to turn to gold,"
(From South China Morning Post)
Friday October 2 1998
Gold wins favour on heels of stocks fall
AGENCIES
Gold rose in Asia yesterday as investors bought the
metal as a safe haven after stocks fell in New York,
where the Dow Jones Industrial Average suffered
its biggest decline in three weeks.
"If the New York stock market isn't attractive,
investors are going to turn to gold," said Masanori
Tashiro, a commodities analyst at Sunrise Trading.
Many saw gold as a lower-risk investment than
equities or currencies, traders said.
Gold for delivery in August next year, the most
active contract on the Tokyo Commodity
Exchange, rose 21 yen to 1,289 yen a gram, or
US$293.27 an ounce, a more than one-month high.
In London interbank trading, gold for immediate
delivery gained as much as 10 cents to $297.05 an
ounce.
Benchmark US and European stock indices staged
their biggest falls in a July-September quarter since
1990 on concern about slowing economies
worldwide.
Capital flight in Latin America sent indices there
plunging 20 per cent or more, and Russia's index
lost 71 per cent of its value.
Amid the rout, some hedge funds had exited the
New York Stock Exchange and bought gold, said
Hideo Terasaki, an official at Orient Trading.
"There's a flight to quality," said Peter Upton, a
trader at Dresdner Kleinwort Benson, adding that
lower bond yields had caused bonds to lose some
of their attractiveness as an alternative to stocks
and boosted the allure of gold. |
