BANK PLAN SPARKS GOLD RUSH; EUROPEAN SALES CAP SENDS PRICE OF METAL SOARING.Byline: Bruce Stanley Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. A group of European central banks European Central Bank (ECB) Bank created to monitor the monetary policy of the countries that have converted to the Euro from their local currencies. The original 11 countries are: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, triggered the biggest one-day increase in gold prices in 13 years Monday with a surprise plan to put a cap on their planned sales of gold bullion Gold bullion Investment-grade, pure gold, which may be smelted into gold coins or gold bars. . Gold peaked at $285 an ounce in London on Monday, more than $16 above the price of $268.60 in late trading Late trading Late trading of mutual fund shares occurs when investors placing trades after 4 PM receive the 4 PM price. These late traders can use the information revealed after 4 PM to guide their trades: buying funds when their current value is greater than their 4 PM value and Friday. The price fell back to $279.90 in late London trading and was $281.80 in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of late Monday. The buying marked a sharp break from recent pessimism about gold's long-term prospects, which was accompanied by 20-year lows in the price of gold on world markets. Monday's price gains caused stocks in South African gold-mining companies to jump by an average of more than 15 percent - a welcome respite after a string of mine closures and layoffs. Despite the increase, consumers in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and other wealthy countries are unlikely to have to pay higher retail prices for gold jewelry and other finished products. ``The labor in making the product is probably more important than the cost of the raw material,'' said John Slater, an economist at National Westminster Bank Group. ``A rise of this magnitude is not likely to have a large impact.'' The rebound in gold prices followed the announcement on Sunday by 15 central banks that they would limit their combined sales of bullion to 400 tons per year for a total of five years. Analysts said the banks acted to restore stability to gold prices by removing the uncertainty that a central bank might suddenly sell some of its reserves and drive prices down further. The banks also agreed not to increase their leasing of gold. World prices for the metal had declined markedly since May, when Britain's Treasury announced its intention to sell much of its reserves and replace them with securities denominated in dollars, yen and euros - assets that offered a better financial return. Gold has historically been a haven for investors in times of turmoil, but less so in recent years. It peaked at $875 per ounce in January 1980 - a time when the U.S. inflation rate was in double figures, oil prices were rising rapidly and Soviet troops were entering Afghanistan. CAPTION(S): photo Photo: (color) Gold traders on the floor of the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. make deals during Monday's big gains. Richard Drew/Associated Press |
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