Market finishes flat despite bearish gold outlook
DESPITE a bearish warning on global gold prices and a serious fall in consumer confidence, the local bourse held up yesterday, recovering from an early 20-point drop to finish only slightly lower.
DESPITE a bearish warning on global gold prices and a serious fall in consumer confidence, the local bourse held up yesterday, recovering from an early 20-point drop to finish only slightly lower.The S&P/ASX200 lost 0.06 per cent, down 2.9 points, to 4190.5. The broader All Ords lost 0.04 per cent, down 1.9 points, to 4249.8.The deputy governor of the Reserve Bank, Ric Battellino, warned that the Australian economy would suffer some spill-over effects from Europe's debt-crisis.The news didn't bode well for consumers, who last month suffered a sharp fall in confidence, according to the Melbourne Institute-Westpac Consumer Confidence survey."The boost to the consumer mood from the November rate cut was relatively temporary," said ANZ senior economist Katie Dean."Households are becoming more concerned about the troubles in Europe and what this means for employment prospects."You can't ignore this result, but it's not necessarily a sign that the economy is about to weaken significantly, given business confidence is holding up quite well."A swag of gold miners lost ground after the US-based economist Dennis Gartman, who foresaw the 2008 commodities slump, warned the metal could fall to as low as $US1475 an ounce - close to $US500 below its record high of $US1921.15 on September 6.The weak Indian rupee could make it more expensive for the world's biggest consumer of gold to buy the precious metal."Since the early autumn here in the Northern Hemisphere gold has failed to make a new high," Mr Gartman wrote. "Each high has been progressively lower than the previous high, and now we've confirmation that the new interim low is lower than the previous low. We have the beginnings of a real bear market, and the death of a bull."Among the gold miners, Newcrest Mining lost 1.15 per cent, or 37?, to $31.81, and Kinsgate dropped 4.69 per cent, or 31?, to $6.30. OZ Minerals fell 4? to $10.68 and Medusa Mining rose 1.23 per cent, up 6?, to $4.93. Gold traded late yesterday at $US1639.90 an ounce.Mining and banking stocks were mixed. Rio Tinto was up 40? to $63.16 and BHP Billiton lost 12? to $35.70. ANZ closed 23? higher at $20.97, while Westpac lost 3c to $20.80. The Australian dollar finished flat at $US1.