December 20, 2002
Gold Price Volatility Will Continue
Gold prices on the spot market soared to six-year highs of $354.50 a troy ounce on Dec. 19 before dropping to about $345 an ounce by the end ofthe day. Gold futures rose sharply to $346.50 a troy ounce on the Commodity Exchange Division of the New York Mercantile Exchange.
Both price spikes were spurred by reports of Iraqi weapons declarations falling short of United Nations requirements and subsequent negative comments by Secretary of State Colin Powell. Gold prices were also pushed higher by new investors suddenly interested in gold because it cleared the $330-per-ounce threshold.
Analysts expect prices will continue to fluctuate through the end of the year because of intermittent dealer and speculator sell-offs, as well as the desire many speculators have to take profits by year end, says The Wall Street Journal. Just a year ago, gold was selling at around $280 a troy ounce.
The Rapaport Report says gold imports into India the world's largest gold consumer were badly hit as prices soared. Indian gold importers temporarily suspended work since no one is willing to buy at the higher prices. Traders in India said they would return to the market once prices fell to $330 an ounce, or stabilized at current levels for about two weeks.