Financial Post begins to take an interest in gold

By Myra P. Saefong
www.CBS.MarketWatch.com
September 14, 2001

NEW YORK -- December gold prices jumped as high as $300
an ounce in Access trading at the New York Mercantile
Exchanged Friday, following a more than $4 an ounce climb
in spot gold prices. Traders bought into the commodity as a
hedge against the uncertainty over the economic effects of
Tuesday's terrorist attacks in the U.S.

December gold jumped by as much as $20 to $300 an ounce
at the start of Access trading, and ended the session at
$292.70, up $12.70.

The Commodities Exchange division of the Nymex remained
closed for regular trading Friday, but Nymex Internet-based
Access trading opened at 2:30 p.m. Eastern time for major
futures contracts trading. quot;Technical difficultiesquot; forced
the New York Mercantile Exchange to suspend trading for an
hour shortly after the open, but the exchange extended
Access trading to 6 p.m. to make up for it.

Spot gold closed at $285.25 an ounce, up $5.50 Friday.
The London p.m. gold fix was at $285.75.

December silver also climbed by 11.5 cents to $4.34 an
ounce in Access trading.

Adding to support Friday was confirmation that about
12 tons of gold, worth roughly $106 million, are buried in
the debris pile from New York City's devastated World
Trade Center. The gold bars were stored in an
underground warehouse near the Twin Towers and held
on behalf of Comex.

Jonathan Potts, managing director at FideliTrade Inc.,
co-parent of the Delaware Depository Services along
with AT Systems, said there's no way of knowing when
the gold will be dug out of the rubble.

However, Alaron.com senior metals analyst David Meger
noted that the quot;amount of physical gold should not be
an issuequot; because banks can borrow gold for delivery.

Any moves higher are likely quot;done on short covering
and speculative buying in light of recent events,quot; he
said. Meger won't rule out a quot;chance for a squeeze,
but once again that would more than likely be created
by other factors than the buried gold and silver,quot; he
said, as the metal is not destroyed but simply
inaccessible for a while.

John Mesrobian, president of Constantinople
Advisors in Williamsburg, Va., argued that there
is actually very little real physical gold around to
borrow and that bullion banks are quot;in trouble,quot;
because they can't deliver and warehouse stocks
were low to begin with.

In other metals news, spot silver added 5 cents to
$4.26 an ounce, and spot platinum tacked on $19
to $470 an ounce.

Major metals stocks on the Toronto Stock Exchange
closed sharply higher Friday, following declines a day
earlier.

Shares of Placer Dome Gold added 79 cents to close
at $19.19, after falling on Thursday. Glamis Gold gained
95 cents to $6.20, and Franco Nevada Mining climbed
by 94 cents to settle at $21.65.

------------------------------

Myra P. Saefong is a reporter for
CBS.MarketWatch.com in San Francisco.