*** Bullion Traders Cautiously Upbeat On Tanigaki Gold Remarks ***
Offhand, and without getting completely goofy, I can't think of many things that would be as bullish w/r to the PoG as this would be if acted upon by the ministry.
Gold bulls..... let us pray! <vbg>
Bullion Traders Cautiously Upbeat On Tanigaki Gold Remarks
Sydney, Jan. 28 (Dow Jones) - Asian bullion traders have reacted with cautious optimism to remarks Wednesday afternoon by Japan's finance minister on the country's desire to re-examine its foreign exchange reserves, including its gold holdings.
"It's certainly very interesting, and if Japan do go ahead and buy more, it would have a very, very positive impact on gold," Martin Mayne, associate director of bullion sales at N M Rothschild and Sons in Sydney, told Dow Jones Newswires.
Sadakazu Tanigaki said his ministry will carefully consider whether to change the composition of its US$673.53 billion in forex reserves, including the weighting of gold in that total.
According to the latest data, Japan has a relatively low amount of bullion compared with other nations, including the U.S. The market may interpret the remark as suggesting it will move to diversify its portfolio on concern over heavy exposure to U.S. dollar-denominated assets.
While traders said the initial reaction in the bullion market was muted, they credited the news with nudging up the spot price by about US$1 in late afternoon Asian trade.
Of the four traders reached by Dow Jones Newswires, all said the key question was whether words translate into action and Japan does indeed go ahead and buy more bullion. If so, the price of gold stands to rise, they agreed.
"It's a little unusual," said one Hong Kong trader upon learning the news, "but presumably good for gold."
At 0650 GMT, spot gold was quoted at US$409.55 a troy ounce, down 57 cents from Tuesday's late New York price, but up from an intraday low of US$408.30 earlier Wednesday in Asia.
--- Nicholas Sinclair, Dow Jones Newswires, 612-8235-2957 nicholas.sinclair@dowjones.com (James Simms in Tokyo contributed to this report)
Copyright 2004 OsterDowJones Commodity News (ODJ). All rights reserved.
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