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

To: goldsnow who wrote (2468)	10/26/1997 6:18:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116893

Australian shares outlook: Lower, focus on Asia/gold/resources AFX, Sunday, October 26, 1997 at 17:03 SYDNEY (AFX-ASIA) - Share prices are expected to open sharply lower led by resources and gold stocks and head of Hong Kong's opening, dealers said. On Friday the All Ordinaries index was down 53.6 points at 2,561.3. Trade on SYCOM was down 36.0 points at 2,510.0 on volume of 1,602 lots. Dealers said weaker commodities, a sharp fall in gold and a sharply lower Wall Street on Friday will drag the market down by as much as 2 pct at the start. They said the rebound in Hong Kong on Friday was "irrelevant". Dealers said Australian gold miners will be hard hit after gold fell 15. 70 usd to 307.30 usd an ounce in U.S. trading as the market feared Asian investors will sell their holdings and on reports that a Swiss bank is about to sell 1,400 tonnes. "The sentiment in gold will be negative and we'll see probably quite a significant drop on gold shares," Merril Lynch's John Banos said. All gold stocks will be affected by the slump with leaders Normandy Mining Ltd, Lihir Gold Ltd and Newcrest Mining Ltd all expected to come under pressure. Dealers said that the only significant group that kept the faith and kept buying gold were Asian investors. The market now expects that not only will those Asian investors stop buying as much gold because the fall in exchange rates has slashed their buying power but they will actively start selling it to support their currencies, dealers said. Support for gold was further weakened after one of its few remaining champions, the Swiss National Bank, said it was considering the sale of 1,400 tonnes of bullion sometime in 1999, dealers said. While the volume itself is insignificant, the fact that the Swiss bank is even considering the sale is negative for the market, dealers said. Among the blue chip resource stocks BHP Co Ltd and Rio Tinto Ltd are expected to come under pressure following copper's fall to just over 0.90 usd per pound, dealers said. "Weak commodities, particularly copper, are really going to pressure the miners," Dicksons Ltd broker Jon Hancock said. One dealer said: "The drop in the U.S. was evidence that investors did not believe that the falls were over in Asia and that there would be more to come." "In all likelihood currencies and stock markets accross the region are going to drop again before we see a rise and some of them are going to come down hard," the broker said. Dealers said the market's main focus, however, will be Hong Kong. "I think what will be crucial is how Hong Kong goes this morning," Bankers Trust Australia's Dirk Morris said. "We had a bit of a bounce on Friday but I guess the way Europe and the U. S. traded on Friday makes me think Hong Kong will actually come off again this week," he said. Dealers said markets, including the U.S. market, will look to Hong Kong for direction this week. "Many investors are sitting on the sidelines and have used the weekend to sit back and try to figure out what is going on in Asia," an analyst said. Investors grew uncertain about Hong Kong's future in light of forecasts for a long-term slowdown in its property market, renewed speculative attacks on its currency and continued high interest rates. Those concerns are shared by investors across Asia who have also been shocked by a dramatic fall in the gold price and commodities after the Hong Kong government vigorously defended its currency against speculators last week, dealers said. Commonwealth Bank chief economist Bruce Freeland said he expects that the market may come off 1-2 pct from the start. //Begin Meta Data// Country:Australia(AST); ÿ