ALAN FINLAY, Johannesburg | Tuesday 5.00pm.
THE gold price rocketed for the second day running on Tuesday and at 4pm had burst through the $300 mark, setting a new fifteen month high of $304,68 to the ounce.
Its dramatic one-day hike of $23, which analysts called “unbelievable”, fell just short of covering as much ground in 24-hours as it did in the week since Tuesday’s Bank of England bullion auction.
Only financials on the local market took a downward slide of 0,37%. Analysts blame small niche banks which “came out of the woodwork by the dozen” but which are struggling to capitalise themselves, lending fear to the sector.
The JSE overall ended the day 1,78% in the black with industrials gaining 0,60%. The Alsi-40 looked strong ending the day 2,09% in the clear.
But despite the glister, Standard and Poor’s analyst Ray Brand warns that gold is likely to loose some of its shine before the end of the week. “There’s been a lot of profit taking by speculators and they’re going to cut their position somewhere,” he said, predicting that it will probably slide back to the $280 mark.
Dealers on Monday attributed the hike to Sunday’s statement in Washington by the European Central Bank that it will limit selling bullion to about 400-tons a year over a five year period and that it will not expand gold leasing over that period. “This has taken a great unknown out of the market,” Brand said.
He also said markets are looking nervous ahead of Y2K, which is putting gold in a positive light.
Gold shares on the JSE boomed to end the day 16,55% up at 1374. Platinum gained ground off the back of gold, and by late afternoon had strengthened 5,61% to $405,00.
The rand looked confident on Tuesday against major currencies, and at 4pm was trading at R5,97 to the dollar and R9,85 to the pound.