MARKETS

MARKETS

Gold spurts as stocks dip
Gold prices rallied to near $1,900 per ounce in the global market as investors continued to seek a safe haven from volatile equity markets and economic uncertainty.

Prices closed at US$1,885 to $1,886 per ounce in Hong Kong, up $23 from Friday. Local prices closed up 600 baht to set a new record at 26,700/26,800 baht per baht-weight following seven intraday adjustments by the Thai Gold Traders' Association.

The gains came as regional stock markets again went through a rollercoaster ride as investors feared the possibility of a new global recession.

The Stock Exchange of Thailand index closed at 1,067.84 points, down 0.13% or 1.36 points in trade worth 34.16 billion baht. The index fell to as low as 1,051.72 in morning trade before rallying late.

Tokyo stocks fell 1.04% yesterday, as traders braced for a new round of currency intervention to help curb the soaring value of the yen, which set a new post-World War II low of below 76 to the dollar. Seoul shares yesterday dropped 1.96%, Shanghai dropped 0.73% while Hong Kong closed up 0.45%.

Analysts said precious metal prices will likely continue to rise as investors reduce their risk exposure to stocks.

"Money is flowing from bonds and equities to gold as a safe haven. No one can say where prices will end up at, but we think we will see $2,000 per ounce shortly," said Boonlert Siripatvanich, the president of Ausiris Futures.

On the Thailand Futures Exchange, investors were betting on further gains through the end of the year, with the August 50 baht-weight contract up 240 baht to 26,700 at the evening intermission, the October contract up 610 to 27,580 baht and the December contract up 680 to 28,120.

The TFEX temporarily suspended trade of silver contracts for 30 minutes after prices rose beyond the daily 10% ceiling. Trading was allowed to reopen at 15:04 pm, with the price limits increased to 20% of the last settlement price.

At the end of the afternoon session, the August silver contract was quoted at 1,315, up 70 from Friday, while October contracts rose 133 to 1,439.

Mr Boonlert said prices were being driven by both speculation and investor fear, and cautioned investors to monitor global market trends closely.

Analysts are mixed on whether the Bank of Thailand may keep rates unchanged at its meeting tomorrow.