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

To: Bill Jackson who wrote (21513)	10/13/1998 9:56:00 AM
From: waldo	Read Replies (1) \| Respond to of 116764

GOLD AS HEDGE... U.S. Pensions Funds Buying Gold as Hedge, Gold Council Says Singapore, Oct. 13 (Bloomberg) -- Pension funds in the U.S. are adding gold to investment portfolios to hedge against risk in financial markets amid concern the economic crisis in Asia will cause a worldwide recession, the World Gold Council said. Five pension funds surveyed by the Council bought 50 tons of gold worth around $476 million in the last 12 months, compared with no gold purchases in the previous 12 months, said Hugh Williams, manager of the Council's Center for Public Policy Studies at a briefing at the East Asia Economic Summit in Singapore. Pension funds haven't bought that amount of gold in decades, so ''I would argue that that places gold in a new context'' as an investment option, Williams said. He added buying of gold by pension funds will likely grow in the coming years both in the U.S. and elsewhere. Williams would not name the pension funds surveyed, saying only that they were ''major funds in the U.S.'' Fears of a global recession are rising as ailing economies in Asia show little sign of recovery. In the past two months, as investors sought assets that would hold their value as equity markets fell and currencies turned volatile, traditional havens such as gold and the Swiss franc rose, analysts said. The price of gold is negatively correlated to prices of most other assets such as stocks and bonds. That's because demand for the commodity -- considered as a safe haven asset -- typically rises when stock and bond prices fall. Inclusion of the metal in investment portfolios will reduce trading risk, Williams said. While the price of gold sank to a 19-year low of $271.13 an ounce in August on selling by central banks in Belgium, Australia and Argentina, the metal has since made up much of that loss. Gold for immediate delivery, recently traded at $296.60 an ounce, up 35 cents from late Monday in New York. In Japan, while stocks have lost about 34 percent of their value since July 1997, the price of gold in yen terms has risen 7.8 percent, said Robert Pringle, head of the Council's Center for Public Policy Studies. Elsewhere in Asia, the price of gold in ringgit in Malaysia is up by 35 percent, while stocks have lost an average of 62 percent of their value. In Thailand, stocks are worth 42 percent less while the gold price is up 32 percent in baht terms in the same period, he said. 08:24:07 10/13/1998