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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (26925)	1/6/2003 2:21:57 AM
From: elmatador	Respond to of 74559

Gold Touches 6-Year High, Oil Nears 2-Year Peak Mon January 6, 2003 01:32 AM ET By Richard Baum SINGAPORE (Reuters) - Gold nudged its highest level for six years Monday, oil hovered near a two-year peak and the dollar dipped as signs the United States and Britain were preparing troops for an attack on Iraq kept markets volatile. But stocks rallied in Asia, led by a surge in Tokyo, as investors set aside war fears temporarily to focus on hopes for a recovery in the U.S. economy. "Markets have accommodated the prospect of a U.S.-Iraq conflict and the strong stimulus being delivered in the U.S. and Europe... should encourage stronger consumer spending, economic growth and corporate recovery," said Michael Wilson, chief investment officer at Ausbil Dexia in Australia. Japanese investors returning from holidays marked by news of preparations for a possible war on Iraq piled into the safe haven of the bullion market. That sent gold briefly back to touch $353.75 an ounce, a six-year high set last month, before it eased to around $352.55 at 1 a.m. EST. "We are... seeing the mobilization of troops in the Gulf and this is keeping the market on edge," said Gordon Cheung, director of precious metals trading at Mitsui Bussan in Hong Kong. The U.S. military has put at least 275 Army Reserve units involving more than 10,000 soldiers on alert to be ready to move overseas, USA Today reported Monday. Britain will begin deploying its troops to the Gulf on January 15, the Sunday Times reported. OIL GAINS, DOLLAR SLIPS The war preparations and the second month of a national strike in Venezuela kept oil prices on the rise, despite pledges from Saudi Arabia and Russia that they would keep their crude supplies flowing to world markets in a bid to calm prices. U.S. crude was up five cents at $33.13 per barrel after rising as high as $33.33, just short of a two-year high of $33.65 hit last week. The war worries left the dollar struggling against the yen, but traders, fearful of central bank intervention, were wary about selling the greenback too heavily. The dollar found some support after Japanese Finance Minister Masajuro Shiokawa said there was a global perception the yen was too strong and its correction would be natural. "War fears are continuing to hurt the dollar. The market is also worried about the outlook of the U.S. economy," said Takashi Toyahara, forex section manager at Nomura Securities. The dollar was quoted at 119.22 yen against 119.66 yen in late New York trade Friday. The euro stood at $1.0437 against Friday's $1.0428. Despite jitters in other markets, stocks had a mostly upbeat day in Asia. Japanese shares closed their first session of the year with healthy gains in the wake of a rise on Wall Street. The Nikkei average rose 1.57 percent to 8,713.33 in a half-day session following an extended New Year holiday. Camera and office equipment maker Canon Inc jumped 2.9 percent, matching last week's gains in the U.S. Nasdaq index. FLYING ON AUTOPILOT "We're pretty much on auto pilot tracking gains in Wall Street and other major markets over the New Year break," said Masatoshi Sato, manager of the equities division at Mizuho Investors Securities. Benchmark indices closed up 1.37 percent in Taiwan, 0.85 percent in South Korea and 0.65 percent in Australia At midday, Hong Kong was up 0.7 percent, but Singapore had slipped 0.6 percent. Strong U.S. manufacturing data last week and President Bush's plan to unveil an economic stimulus package on Tuesday raised hopes for a recovery in the world's largest economy. As U.S. equity traders return for the first full week of the year they will be closely watching data on the service sector due Monday and unemployment figures due Friday, hoping last week's manufacturing data was no one-off. "Investor psychology is hoping for a positive '03," said Tim Heekin, director of trading at Thomas Weisel Partners. "I think early on in the year people are going to look to put a little money to work, and I'd like to think we'll have a nice 2 to 5 percent move up (this) week." U.S. Treasuries were weaker in Asia as investors remained nervous after a panic sell-off last week following the surprisingly strong data on manufacturing. Benchmark 10-year Treasury notes were trading at 99-15/32, yielding 4.06 percent, compared to late New York's 99-27/32 and 4.02 percent.