State-owned energy firm Eskom today told mining giants AngloGold Ashanti, GoldFields and Harmony that it can not guarantee current power supplies to their mines.
By lunchtime in London today, gold had also hit a series of new record highs against all other major currencies barring the Canadian Dollar and Japanese Yen.
European stock markets meantime rose 1.5% while Asian-Pacific stocks ended the day more than 4% higher on the MSCI index.
"The massive retracement in the stock markets on Monday, as in the past, led to gold losing ground," writes Wolfgang Wrzesniok-Rossbach in today’s Precious Metals Weekly from Heraeus, the German refining group.
"Keeping in mind gold’s role as a ‘crisis metal’, this seemingly irrational behavior is perhaps explained by the market having to find quick liquidity to settle losses elsewhere. For next week we expect this relationship between the stock markets and gold to continue.
"However, we expect gold to continue its upward move…perhaps getting as far as $975 an ounce in this first quarter of 2008, before it comes under pressure from a global recession later in the year."
Priced against the Swiss Franc, Gold today broke its high of two weeks ago to reach CHF1,009 per ounce.
Over at the Tocom in Tokyo, all Gold Market futures contracts leapt by ¥120 per gram – the maximum "limit up" permitted by the exchange. Trading in gold for delivery in Dec. ’08 closed at the equivalent of $920.86 per ounce.
On the currency markets, the Yen continued to weaken from Wednesday’s 30-month high vs. the Dollar. The Japanese currency also ticked lower against the British Pound, standing 4% below this week’s 19-month highs despite a raft of bad news for UK investment confidence.
A parliamentary report due out tomorrow will blame the City of London’s watchdog – the Financial Services Authority – for failing to spot the flaws in Northern Rock’s business model, reports the Financial Times.
When the global credit crunch first bit last summer, the over-geared mortgage lender suffered the UK’s first banking run in 130 years. Alistair Darling, the UK chancellor, also "takes flak" in the official report, says the FT.
The European single currency meanwhile ticked 0.4% lower against the US Dollar, and crude oil broke back above $90 per barrel in early trade, rising by more than 4% from Wednesday’s low as Washington agreed a series of tax rebates aimed at stimulating the US economy.
But Treasury bond prices are now so high, the 10-year note pays 0.4% less than the latest reading of US consumer-price rises. Two-year US bonds offer to pay a negative yield of 1.83% per year after inflation