http://www.forbes.com/markets/newswire/2003/01/06/rtr837930.html
Breaking News
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GLOBAL MARKETS-Gold hits 6-year high, oil off peaks on war fears
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GLOBAL MARKETS-Gold hits 6-year high on war fears,oil near peaks
Reuters, 01.06.03, 8:56 AM ET
By Nigel Stephenson
LONDON, Jan 6 (Reuters) - Gold hit its highest level for almost six years
on Monday, oil hovered near two-year peaks and the dollar slipped as the
United States and Britain were reported readying troops for possible action
in Iraq.
Stocks dipped in Europe in the first full trading week of the year after a
profit warning from Dutch airline KLM <KLM.AS> and British insurer
Britannic showed the earnings picture was cloudy at best, although Asian
shares rallied.
Gold <XAU=>, seen as a safe haven in turbulent times, hit a high of $356.25
an ounce, pushing past the previous high of $353.75 touched last month, its
highest since March 1997. It later pulled back to $354.65.
"Gold should remain firm for some time to come with the threat of war
between the U.S. and Iraq and/or North Korea," said James Moore, metals
analyst at TheBullionDesk.com.
The metal's price has soared in the past month as tension has mounted over
possible war in Iraq, North Korea's nuclear brinkmanship and as the U.S.
dollar has fallen. Bullion is 28 percent higher than this time last year.
The U.S. military has put at least 275 Army Reserve units, involving more
than 10,000 soldiers, on alert to be ready to move overseas as soon as this
week, the USA Today newspaper reported on Monday. Britain will begin
deploying troops to the Gulf on January 15, the London Sunday Times reported.
Oil, which has surged in recent weeks on fears war in the Middle East could
disrupt supplies and as a strike in Venezuela has strangled exports from
that country, stayed within a dollar of two-year highs.
However, it pulled back from peaks after the OPEC cartel said it would hike
output to cover lost supplies from Venezuela.
Brent crude for February delivery <LCOG3> was last at $30.55 a barrel, down
22 cents after some profit-taking. It hit a 15-month high of $31.02 a week
ago. U.S. crude <CLc1> was at $32.65 a barrel, down 43 cents and off a
two-year high of $33.65 hit on December 30.
"Prices are off a little after a big rise during Christmas and the New
Year," said Richard Savage of Bank of America. "With uncertainty over the
Venezuelan strike and OPEC's response, I would expect volatile trade over
the next few days."
DOLLAR SLIPS AGAIN
The dollar, seen at risk from the economic fallout of any war with Iraq,
fell again on Monday, hovering above recent lows. It was last at $1.0480
per euro <EUR=>, nearly half a cent above last week's three-year low beyond
$1.05.
Against the safe-haven Swiss franc <CHF=> it was half a percent down at
1.3891 francs, above the four-year low of 1.3805 set last week.
"Dollar weakness is feeding off the Gulf situation," said Neal Kimberley,
senior foreign exchange manager at Bank of Tokyo Mitsubishi. "The market is
in weak dollar mode and wants to see how far it can go."
The greenback was half a percent down on Friday's levels at 118.65 yen
<JPY=>, about a yen above a 3-1/2 month low set last week. Wariness about
potential Japanese intervention to sell the yen increased after Finance
Minister Masajuro Shiokawa said there was a global perception the currency
was too strong.
European stocks were lower after a surge in Tokyo shares.
At 1345 GMT the FTSE Eurotop 300 index <.FTEU3> was down 0.78 percent while
the narrower DJ Euro STOXX 50 index <.STOXX50E> was down 0.3 percent.
KLM shares fell after the airline said it was unlikely to achieve a
full-year operating profit as worsening economic conditions and
geopolitical instability hit traffic.
Shares in Britannic Group <BRT.L> lost half their value after the company
issued a profit warning and scrapped its final dividend.
"There will be more profit warnings as the difficult business environment
unearths companies with flawed strategies and management," said John
Hatherly, head of global analysis at M&G Asset Management.
Tokyo's Nikkei index <.N225> closed 1.57 percent higher as exporters such
as Canon <7751.T> led to a broad-based advance.
U.S. stock index futures <SPH3> <NDH3> were down slightly, indicating Wall
Street was likely to open lower.
Safe-haven euro zone government bonds traded mixed. The yield on the
two-year German Schatz <EU2YT=RR>, which moves in the opposite direction to
the price, was down 3.8 basis points at 2.73 percent but off last week's
3-1/2 year low of 2.674 percent.
The 10-year German Bund <EU10YT=RR> was yielding 4.31 percent, down one
basis point.
Copyright 2003, Reuters News Service
_______________________________________________________
Dr. George Matyjewicz, Chief Global Strategist
GAP Enterprises, Ltd. http://www.gapent.com/
Moderator of E-Tailer's Digest http://www.etailersdigest.com/
Automated Press Releases http://www.automatedpr.com/
Board Member AIB #34 http://www.aib-world.org/
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