Re. "Massive falls coming across the board in the gold sector."
Don't think so, Goblin !
"Gold price soars as investors dump the dollar"
Charlotte Moore Wednesday November 24, 2004 The Guardian
The price of gold was poised to break through the $450 (£240) an ounce barrier last night as the relentless fall in the value of the dollar sent nervous investors in search of a safe haven. Hitting a level not seen for more than 16 years, the price of bullion rallied strongly yesterday in New York, reaching $449.90 in early trading.
Nick Moore, commodities analyst at ABN Amro, said: "The rising gold price is telling us that there is now great uncertainty in the marketplace. It is telling us the US dollar is again in trouble and the world economy may be in trouble."
Gold has been soaring over recent weeks, gaining 7% since the beginning of October, as the dollar has plunged, touching a new low yesterday of $1.31 against the euro. "There is a powerful inverse relationship between the price of gold and the dollar," said Mr Moore.
News that Russia may increase the share of euros in its reserves helped to drive the dollar's fall. The prospects of sterling breaking through $2 over the coming months increased as the pound rose to $1.87 - its highest level against the greenback in seven months.
The US economy's burgeoning trade and current account deficits have caused jitters in the markets since the US election and, as a result, the dollar has fallen almost 2% against major currencies.
Although the government says it supports a "strong dollar", analysts said that meant little in practical terms. "Although the US administration would never say publicly, privately it is probably pretty happy with the dollar's decline, because of the positive effect on US exports," said Julian Jessop of Capital Economics.
Economists are predicting that the slide of the dollar against the euro will continue into 2005. With the dollar likely to remain weak, the outlook for gold looks favourable... "
NCM Price at posting:
0.0¢ Sentiment: None Disclosure: Held
