Financial Daily from THE HINDU group of publications
Tuesday, May 28, 2002
Financial Daily from THE HINDU group of publications Tuesday, May 28, 2002 |
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Agri-Biz & Commodities
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Precious Metals Strong trend in gold raises expectations G. Chandrashekhar
MUMBAI, May 27 GOLD enjoyed an extremely strong period last week. The metal surged higher every day of the week, until it eased slightly on Friday. Weakening US dollar in line with softer US equity markets spooked by a drop in the leading indicators index and warning from US government officials of further terrorist attacks led to the price rally. Geo-political conditions in the West Asia and tension between two Asian neighbours also added to fears. On Thursday, gold broke through the key level of $ 320 an ounce - pushing above $323/oz — its highest level since the European central bank Gold Agreement spike in October 1999. The official Friday price was $320.95/oz (London PM fix), up 3.3 per cent week-on-week. A 20.5 tonnes fall in Comex net long position of large speculators to 117.7 tonnes in the week to Tuesday May 14 also provided some confidence, especially since gold held support towards $306/oz and bounced higher. ``Macro-economic and geo-political concerns, supported by reductions in producer hedgebooks, continue to support the upward momentum for gold. Many in the market are calling $325/oz and then $340/oz as the next major target levels. Given the events of last week and the low likelihood of any quick improvement, it does seem likely that gold will challenge these levels in the coming weeks'', commented Mr. Kamal Naqvi, analyst with Macquarie Research Equities. Silver was reawakened last week jumping above $4.80/oz with at least one large investor moving back towards the white metal, largely for safe-haven reasons like gold. Also, prices are recovering after the Silver Institute annual survey forecast bright outlook. During the week, silver gained 4.6 per cent. The official price on Friday was $4.86/oz (London AM fix). Platinum and palladium, both suffered last week from concerns about economic recovery. Platinum remained virtually unchanged at $539/oz, while palladium lost 4.3 per cent to close at $352/oz.
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