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Gold story on CNN financial

U.S., Euro traders buy gold

Price reaches 3-month high as buyers overwhelm sellers ahead of the monthly options expiry.
August 27, 2003: 12:56 PM EDT



NEW YORK (CNN/Money) - Gold price hit a three-month high in Europe Wednesday as traders saw funds pile into bullion ahead of the monthly options expiration, while a stronger euro also boosted the metal's pull for European investors.

Bullion jumped as big investors sought to boost the option strike price on the back of a steady euro-driven recovery in gold after overnight selling in Asia, analysts said.

In London, gold had risen more than six dollars to $371.95 an ounce against $365.15 in New York late on Tuesday.

At the New York Commodity Exchange, gold jumped $7.50 to $374.30 an ounce in early trading Wednesday, and at one point the precious metal was worth $374.80 an ounce.

"The usual suspects -- the funds -- have been buying but then who's been selling? Nobody," said Peter Hillyard, head of European metals sales at ANZ bank."The market-makers have been constantly finding themselves short at ever-higher levels."

The rally pushed safe-haven gold to levels last seen in the aftermath of the U.S.-led war in Iraq and follows a spate of bombings in the Middle East, India and Indonesia."We're looking for support at $368 but it's hard to see where the upside resistance is. I don't think the run is over yet. The trend is up and it's going to work the $368 -72 range and go higher."

But though the massive size of speculative long positions on the futures market has left some analysts wary, investors still seem able to absorb large-scale selling.

The central Bank of Greece said Tuesday it sold 20 tons of gold last week from which it raised about 200 million for placement in other investments.





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*Gold story on CNN financial, Robert Steinman, PhD(8/27/2003 11:31:31 AM)*