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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Eashoa' M'sheekha who wrote (47979)	2/4/2000 3:00:00 PM
From: Alex	Read Replies (1) \| Respond to of 116753

Gold Soars as Inflation Concern Is Expected to Boost Investor Demand By Claudia Carpenter Gold Soars as Inflation Concern Seen Boosting Investor Demand New York, Feb. 4 (Bloomberg) -- Gold jumped more than 3 percent, the biggest gain in four months, on speculation that more investors will buy the metal as a hedge against inflation after a U.S. jobs report showed the economy heating up. The U.S. unemployment rate fell to a 30-year low, the Labor Department said, raising concern for higher salaries and consumer prices. Gold has lost about 30 percent of its value in the past four years as tame inflation gave investors little incentive to buy it as a store of value. ``A little bit of inflationary potential has gotten the gold market excited,' said Jean-Marie Eveillard, fund manager for the $15 million First Eagle SoGen Gold Fund in New York. ``The knock against gold for the past 20 years has been inflation's coming down and then it stayed down, so what do you need gold for? I think that perception's changing.' Gold for April delivery rose as much as $10, or 3.4 percent, to $299.90 an ounce on the Comex division of the New York Mercantile Exchange, the highest price since Nov. 29. It was the biggest gain since Oct. 4. Prices are 2 percent higher than a year ago. In London, gold for immediate delivery rose as much as $9.30, or 3.2 percent, to $296.75 an ounce. The U.S. jobless rate fell to 4 percent in January, the Labor Department said, as businesses added workers at the fastest pace in more than two years. The decline from 4.1 percent in December brought the unemployment rate to its lowest level since January 1970. The U.S. economy entered a record 107th month of expansion this week and may still be gaining momentum even after four quarter-point increases in borrowing costs ordered by the Federal Reserve since June. Further Action? Gains in gold could be limited by expectations that the Fed is ready to boost interest rates further to keep inflation in check, traders said. ``Certainly they can affect the amount of funds in the system, and they can control interest rates,' said Leonard Kaplan, chief bullion dealer at LFG Bullion Services in Chicago. Even though the central bank has no control over rising commodity prices, `` I still don't think the Fed will let inflation get out of hand,' he said. Contributing to the drop in gold prices in recent years have been sales of bullion reserves by central banks seeking assets with better returns. ¸2000 Bloomberg L.P. All rights reserved. Terms of Service, Privacy Policy and Trademarks. quote.bloomberg.com