Shares in gold companies soared yesterday as the metal hovered around historically high levels in response to investor fear of European currencies.
New Zealand's biggest gold miner, OceanaGold, powered up another 32c to $3.80 after Wednesday's 28c rise.
The company has enjoyed a sharp rally from a low of $1.03
last September because of a shift of focus and reserves upgrades but it was getting spinoff from gold price fever.
"Gold does inspire that," said Hamilton Hindin Greene client adviser James Smalley.
Across the Tasman gold miners Newcrest and Lihir Gold jumped in morning trading in the wake of steep overnight price rises.
The euro has dropped 12 per cent against the US dollar this year on concern that budget deficits in Greece, Spain and Portugal will escalate.
Over the weekend, the European Union and the International Monetary Fund announced a rescue package of more than $1 trillion.
"Gold is expensive, but people in the euro zone are moving out of their currencies and forcing themselves into gold, said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago.
"There's a lot of fear on the part of the Europeans that moves to mitigate their debt crisis will only lead to more problems. People want to be in the currency of last resort."
The whole bailout is quantitative easing across all of Europe, said Michael Guido, the director of hedge-fund sales at Macquarie Bank in New York, who expects gold to rise to US$1500 by the end of the year.
Gold has gained 13 per cent this year following nine straight annual gains. The metal has outperformed stocks, bonds and other commodities in 2010.
"All we can do is to put our money into real assets, because paper money everywhere is being debased," said Jim Rogers, the chairman of Rogers Holdings in Singapore.
- BLOOMBERG, STAFF REPORTER
