Gold rose, closing at the highest price in more than a year, as investors sought haven from tumbling equity markets and looming US military action against Afghanistan.
Gold futures surged last Friday in the first trading session after terrorists destroyed the World Trade Center. Prices have been little changed around US$290 an ounce since then even as the worst week in almost 70 years for the Dow Jones Industrial Average signaled that more investors might switch from stocks to bullion.
"It really needs to get over US$300 an ounce to do anything special," said Michael Martin, a trader at Sinclair Group in New York, part of RF Lafferty. "If they stabilize financial markets at all, then gold will go down."
Gold for December delivery rose US$3.10, or 1.1 percent, to US$292.90 an ounce on the Comex division of the New York Mercantile Exchange, the highest closing price for a most-active contract since June 28, 2000.
Prices touched US$300 an ounce during the abbreviated electronic trading session on Friday. Gold is up 7 percent since Sept. 10, the day before attacks, which have been blamed on terrorists who are under the protection of the Taliban regime in Afghanistan.
About US$1.38 trillion in value has been erased from US equity markets since trading resumed Monday. Nymex trading hours have been truncated to give traders more time to get to and from the exchange, which is two blocks from the Trade Center in lower Manhattan. Floor trading in gold ended at 12:35pm today and will end at 1pm next week, 1 1/2 hours earlier than normal.
"It would be nice if the gold market was open later," Martin said. "It doesn't give you much of a full trading day, especially for people like us, as we follow the shares and mining companies."
The Philadelphia Gold & Silver Index of nine major mining companies fell 1.9 percent to 58.2, after gaining 6.9 percent Monday through Thursday. Shares in companies such as Newmont Mining Corp are "running out of steam," Martin said, adding that further gains in gold prices would likely send them higher again.
Denver-based Newmont Mining Corp, the second-largest gold producer after South Africa's AngloGold Ltd, fell US$1.63 to US$22.27 in trading on Friday.
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