GOLD stocks led the upside as the JSE extended gains by noon today in what a trader said was an indication that there was still an appetite for risk with the weaker dollar helping to boost gold. At noon the JSE all share index had added 1.09%, with resources up 1.47%, gold miners rising 3.44% and platinum producers collecting 0.60%. Banks firmed 1.17%, financials were up 0.77% and industrials moved 0.82% higher.
The rand was bid at R7,33 to the dollar, from R7,38 when the JSE closed on Monday. Gold was quoted at US$1,195.05 a troy ounce from US$1,176.25/oz at the JSE's last close, and platinum was at US$1,471.50/oz, from US$1,450/oz the bourse's previous close. "Gold stocks are very, very strong. They have been lagging a bit. The dollar price of gold is up, the dollar has weakened again," the trader said.
"There is still an appetite for risk assets, but there is also still a chase for safe haven. "I think it's the time of year where there is demand for gold, these gold shares have been lagging," he said. "The appetite for risk in the market is still quite strong, and gold shares are leading the upside. There are some stocks that have been sold off and now we are seeing a bit of bargain hunting coming into the market. Dow futures are up at the moment, it looks like we will continue being
positive," he said.
Dow Jones newswires reported that the FTSE 100 built on gains as worries over Dubai World's debt crisis abate following the company's restructuring plan, prompting appetite for risk to rise, traders said. Traders now cast their attention to UK PMI manufacturing data, which continued to show positive results for November but at a sharply slower pace than in October. The index is down to 51.8 for November from a downwardly revised 53.4 for October. "It is yet another piece of data which shows that the UK is having a much harder time recovering than our G10 counterparts," said David Morrison, strategist at GFT. Next up on the economic data plate, eurozone unemployment figures, due 10:00 GMT. The FTSE 100 was last up 1.68%. US stocks are called to open higher, as investors shrug off the Dubai
World news, said David Morrison at GFT.
He called DJIA up 70 points and S&P 500 up eight points. "For now, at least, the problems in the Gulf are seen as relatively minor and contained, with little chance of the contagion spreading," he said. However, Morrison noted a feeling that the full extent of Dubai's liabilities are far from clear. Nevertheless, the dollar is being sold and proceeds are going into risk assets, Morrison added. US ISM manufacturing, pending home sales and construction spending are at 15:00 GMT.
