Thursday, August 25, 2011

FTSE 100 posts fourth rise as gold decline continues

The FTSE 100 rose for a fourth day and gold continued to tumble as markets became more upbeat about the economy.

The blue-chip index increased as many as 49 points to 5,254 in early trading, before dipping slightly to stand 13 points ahead at 5,219 by mid-day.

Meanwhile, gold slipped to $1,707 an ounce, taking losses to more than $200 since it hit a record high of $1,911.46 on Tuesday ? an 11% decline in three days.

Gold is seen as a safe haven and investors have been flocking to the precious metal in recent weeks amid growing uncertainty about the outlook for shares, bonds and other assets. As a result, the gold price has notched up a series of new records this month and analysts said its decline ? combined with this week's rally in shares ? suggested investors believed the recent stock market falls may have been overdone.

"There are people out there with cash and they are ready to deploy it. There is a sense that we are beginning to find a bottom, or are in the bottoming process, in equities at the moment," Michael O'Sullivan, of Credit Suisse, told Bloomberg Television.


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Source: http://www.guardian.co.uk/business/marketforceslive/2011/aug/25/markets-post-another-rise

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