- LONDON (Reuters) - Gold jumped
in Europe on Tuesday to its highest in more than 7-1/2 years for the second
session in a row as fund buyers seized on a surging euro and news that
Barrick Gold Corp would reduce its forward sales to zero over time.
-
- The chief executive of Barrick said the firm would no
longer sell its gold forward at set prices, announcing a change in its
long-established hedging policy.
-
- Greg Wilkins told Reuters the world's third biggest gold
producer and largest hedger would look at ways to reduce its forward
sales program in a measured way.
-
- "This represents one of the medium term shocks I've
been highlighting that could happen in the gold market and that is that
we might see faster than expected producer de-hedging next year,"
said John Reade of UBS Investment Bank.
-
- "They said they're looking at ways to reduce their
hedge book but are not under pressure to do so. That means possibly buy
back, possibly reducing their hedge book to zero over time -- that's the
new bit," he added.
-
- The euro climbed to a record high against the dollar
as sentiment on the U.S. currency remained negative given geo-political
worries and a huge U.S. current account deficit that continues to overshadow
strong U.S. economic data.
-
- A weaker U.S. currency makes dollar-denominated gold
less expensive for holders of other currencies like the euro and the
yen.
-
- Spot gold was quoted at $402.95/403.70 an ounce by 1605
GMT (12:05 p.m. EST) after hitting a high of $405.55 -- last seen in
late February 1996. It also compared with $402.25/403.00 last quoted in
New York on Monday.
-
- London dealers fixed gold on Tuesday afternoon at $401.35.
The euro was at $1.2085/86 after hitting a new lifetime high of $1.2089
earlier.
-
- Dealers put key support at $395 and resistance at $405.00,
with an eventual upside target of $415.00.
-
- Gold failed twice in recent sessions to dig in above
$400 an ounce as speculators took profits and rolled long positions before
the December contract went into delivery last week. Continued ...
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- http://www.reuters.com/financeNewsArticle.jhtml;jsessionid=GNBE3RWI24
C54CRBAEOCFFA?type=businessNews&storyID=3924562
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