GOLD SHARES IN DEMAND: HEAVY TRADING

Greymouth Evening Star, 21 September 1949, Page 6

GOLD SHARES IN DEMAND: HEAVY TRADING

LONDON, September 20.—Although the London Exchange, as a result of the devaluation of the £, was closed yesterday, active unofficial dealings resulted in one of the biggest “street markets” of recent years. The biggest feature of the day was a boom in gold shares, which rose about 20 per cent. Commodity shares were also strong, notably coppers, tins, and oils. Tobacco shares eased. Rubbers gained from 10 to 15 per cent. Dealers in gilt-edged securities met a Government broker, and agreed upon the opening prices of British Government securities for dealings today. These opening prices were up to £2 less than Friday’s prices.

Pandemonium reigned when the Stock Exchange reopened this morning. Dealers had difficulty in controlling the large crowd, which clamoured for shares in anything .reputed to have gold in it. All South African shares were marked up. ’ Jostling Crowds

A shouting mass of stockbrokers and speculators in gold shares blocked the streets and roads in the Stock Exchange area yesterday. Fortunes were made in minutes. Long lanes of traffic were at a standstill as speculators, waving papers, milled about in jostling shouting crowds. South African gold shares rose as much as 63 per cent, above the predevaluation levels. Low grade mining shares, which vyill be revitalised by the higher gold price, benefited most. Observers said that more business was transacted in a few hours than in the official Stock Exchange trading during the last few weeks. One broker is known to have made a profit of hundreds of thousands sterling. He has been accumulating gold shares for a year in the hope of devaluation. Many brokers said that the closing of the Stock Exchange yesterday had defeated its object of giving the markets a breathing spgce and allowing them to adjust themselves to the devaluation decision. In the crush in street dealings it was impossible to keep in touch with the rapid price changes. Toronto Exchange Traders also went wild on the Toronto Stock Exchange yesterday. The trading floor was a bedlam, with floor men shouting and dashing from post to post. In the first hour the exchange’s gold index, which is compiled from representative stocks, made a record gain of 9..56 points to 114.63, which is the highest level it has reached since 1947. It was the sort of day gold men had been looking for since the dark days for them in July, 1946, when Canada put her dollar at par with the American currency, raising it from 90,- cents. The devaluation of sterling started yesterday’s rise, but gold traders were also thinking about the possibility that the Canadian dollar would be devalued. At the end tof a hectic session, gold stocks on the Toronto exchange closed near the high levels established in the opening hour. The exchange’s gold index finished at 113.78 —a gain of 8.71 points for the day. The turnover for the day was 4,112,000 shares. , In New York yesterday stocks declined fractionally as the first reaction to the devaluation of sterling and other .related currencies. Commodity markets also were bearish, especially for products which the United States purchases from the sterling area. Exceptions to the decline were gold and silver shares, which advanced slight- | ly *Mbst regular prices dropped as headers reacted to devaluation. Wool I futures dropped the permissible limit I of one cent, per lb. Rubber futures sold I at two cents per *lb lower than syri- . thetie rubber on the- New York mar- • \ ket. Cotton futures dropped slightly, and in the hide market prices dropped to one cent per lb.