LONDON, 26 September 2003 — Gold jumped up to its highest level in more than seven years yesterday as speculators piled into the metal, spurred by a surprise decision from OPEC on Wednesday to cut oil output and a weaker dollar, which raised bullion’s safe-haven appeal.
“The bulls have got the bit between their teeth and any news is good news - it doesn’t matter what it might be, it’s good news,” Societe Generale economist Stephen Briggs told Reuters. Share prices drooped on concerns that higher oil prices could threaten an economic rebound in the United States, leading to a wave of gold short covering in Asian and European trading.
Further fuel was added to gold with the release of disappointing US economic data.
Spot gold closed in Europe at $390.40/$391.10 per troy ounce after spiking to a high of $393.30 - not seen since mid-May 1996. That compared with $387.00/387.80 at the New York close on Wednesday.
The dollar appeared to have settled down in a tight range against the yen in late trade yesterday as markets paused for breath after a sell-off associated with last weekend’s G-7 meeting, analysts said. The dollar was being traded at 111.71 yen against 112.69 on Wednesday in New York.
The euro stood at 1.1519 dollars, against 1.1494 late on Wednesday
Meanwhile, European shares were mixed yesterday. London’s FTSE 100 index Fell 0.81 percent at 4,202.2 points. In Paris the CAC 40 shed 1.02 percent to 3,230.54 points, while Frankfurt’s DAX had gained 0.28 percent to 3,316.66 points in late trades.
The Dow Jones Industrial Average rose 11 points, or 0.11 percent, to 9,437. The broader Standard & Poor’s 500 Index edged up 4 points, or 0.40 percent, to 1,013. The technology-laced NASDAQ Composite Index added 6 points, or 0.33 percent, to 1,850.
Asian share prices closed weaker yesterday. In Tokyo, the Tokyo Stock Exchange’s Nikkei-225 index lost 192.25 points to end at 10,310.04. The broader Topix index of all first-section stocks lost 26.27 points or 2.52 percent, to 1,017.39.
South Korean share prices closed down 1.54 percent but were off the lows and holding well above the key 700 points level as late bargain hunting lifted Samsung Electronics and other majors, dealers said. The composite index closed down 11.18 points at 713.52, off a low of 699.83 and a high of 714.56. Volume was 403.1 million shares worth 2.2 trillion won ($1.91 billion).
In Hong Kong, the key Hang Seng index lost 9.37 points, or 0.08 percent, to close at 11,286.52,. The Philippine Stock Exchange composite index fell 4.38 points to 1,314.19 points having traded between 1,309.28 and 1,317.11.
The Bombay Stock Exchange’s 30-share index shed 59.24 points to close at 4,297.15.