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Index takes on a golden hue
By Ye Zhen |
September 20, 2012, Thursday
|
Print Edition
Print Edition
GOLD counters yesterday helped push the Shanghai stock market to edge up at the close on speculation gold prices will rise after Japan's central bank joined the US Federal Reserve by raising its bond-buying program.
The Shanghai Composite Index ended a two-day losing streak and gained 0.4 percent to 2,067.83 points.
The Bank of Japan will expand its asset-purchase program by 10 trillion yen (US$126 trillion) and intends to buy 80 trillion yen worth of assets by the end of 2013, it said after a two-day board meeting ended yesterday.
Analysts are generally optimistic as they expect gold prices to rise as the Japanese action and the earlier Fed's third round of quantitative easing measures, or QE3, will further boost gold demand.
Zhang Jiuhui, analyst at Greatwall Securities, said that QE3 is fueling the gold's popularity as investors will buy the precious metal to hedge against the risk of a weaker US dollar.
But Chang Qing, chief analyst at Huaxi Securities, advised investors to be cautious because measures to battle inflation, which may pick up following policy easing, are likely to post risks to gold stocks.
Gold stocks rose to the highest level in more than six months. Zijin Mining Group, China's largest gold firm, added 4.9 percent to 4.08 yuan (65 US cents), Shandong Gold Mining Co gained 6.7 percent to 41.58 yuan, and Zhongjin Gold Corp soared 8.5 percent to 17.79 yuan.
The Shanghai Composite Index ended a two-day losing streak and gained 0.4 percent to 2,067.83 points.
The Bank of Japan will expand its asset-purchase program by 10 trillion yen (US$126 trillion) and intends to buy 80 trillion yen worth of assets by the end of 2013, it said after a two-day board meeting ended yesterday.
Analysts are generally optimistic as they expect gold prices to rise as the Japanese action and the earlier Fed's third round of quantitative easing measures, or QE3, will further boost gold demand.
Zhang Jiuhui, analyst at Greatwall Securities, said that QE3 is fueling the gold's popularity as investors will buy the precious metal to hedge against the risk of a weaker US dollar.
But Chang Qing, chief analyst at Huaxi Securities, advised investors to be cautious because measures to battle inflation, which may pick up following policy easing, are likely to post risks to gold stocks.
Gold stocks rose to the highest level in more than six months. Zijin Mining Group, China's largest gold firm, added 4.9 percent to 4.08 yuan (65 US cents), Shandong Gold Mining Co gained 6.7 percent to 41.58 yuan, and Zhongjin Gold Corp soared 8.5 percent to 17.79 yuan.
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