Orientals go for gold

Press, 30 November 1989, Page 34

Orientals go for gold

NZPA-Reuter Tokyo Cash from Far East investors is flooding the floors of world gold exchanges on the perception that on fundamentals, the metal now looks more promising than currencies and stocks, traders in the region say. “Basically, the advances this time are based on gold's improved fundamentals. In the long run, the bulls are likely to lead the market, perhaps to SUSSOO,” Mr Takeo Umezawa, a senior trader at Sumitomo Corporation, a leading trade house said. Bullion has climbed more than SUS3O (SNZSO.7) an ounce since October to trade about 5U5414.50 in the East on Tuesday. The 3 p.m. London fix Tuesday priced gold at 5U5409.75. The recent price surge was

due to a number of factors on both the supply and demand sides, in addition to heavy speculative flows from the equity markets, gold analysts said. “In addition to jitters over stock prices, interest rates and the dollar, the supplydemand balance has improved a lot because major producers have stopped selling forward," said Mr Itsuo Toshima, regional manager of the World Gold Council, a global industry promotional body. This year began with heavy forward selling by such producers as Canada, the United States and Australia. However, traders said they saw them as now having sold most of their stocks forward. A slowdown in gold production by those three nations was also likely in calendar 1990.