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Gold price soars as investors seek safe haven
The metal touched its biggest one-day gain in nine years
By: Diamond World News Service
Sep 21 2008 3:10AM
Reference: 3064  


The recent volatility in gold prices and the slump in the US economy has created a spur in gold investments, as consumers preferred the metal for safer investments. As the prices touched great highs, it pushed stocks in Australia's top gold miners.

Gold enjoyed its biggest one-day gain in nine years, with gold futures for December delivery adding $US70 an ounce, or 9 percent, on the Comex division of the New York Mercantile Exchange, ending Wednesday’s trading session at $US850.50 an ounce. Such a percentage gain in a session was last seen on September 28, 1999.

In local trading, on 18th September 2008, the spot price was traded at $US869 an ounce, up $US85.70 on Wednesday's close. BGF Equities analyst Warwick Grigor said to the media, that when the financial markets hit similar lows in 1974, what followed were four to five years of gold price outperforming. He also opined that the overnight change in gold indicates change of times. The movement could inspire a new bull market in gold, and the recent rally in the US dollar had taken the focus away from a "dire straits financial sector.

The gold sector did face difficulty in the year, but the high performance in the last two days has meant top producers soared into the black. Newcrest rose 14.54 per cent, adding $3.11 to close at $24.50, while Sino Gold rose 80c, or 22.54 per cent, to reach $4.35. Lihir Gold was up 15.89 per cent to $2.48.

Analysts have also opined that nearly two weeks ago, the commodities were not keenly looked into due to a retard growth across the globe, but the US financial fall has opened the investments into gold, to influence a 10 percent growth in one session. Also, oil has been one of the hardest-hit commodities following concerns of a slowdown, falling a third in the past three months. It dropped below $US100 for the first time since early March. New York futures were down about $US1 a barrel to be near $US96, Goldman Sachs, this week lowered its short-term forecasts for crude. The US investment bank now sees prices averaging $US116 for the rest of the year, down from a previous forecast of $US129, and averaging $US110 next year, down from $US140.

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