Gold jumps above $300
Bad news for stock investors is good news for gold -- finally.
February 6, 2002: 1:02 p.m. ET
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NEW YORK (CNN/Money) - The price of gold rose above $300 an ounce Wednesday afternoon, its highest level in two years, as money continued fleeing the U.S. stock market for one of last decade's least-loved assets.
Gold futures for April delivery rose as high as $307.50 before backing off in their third straight day of gains.
The advance for the traditional safe-haven investment comes amid growing worries that bankrupt Enron's accounting problems are not isolated.
"All of a sudden, people are saying 'can't I truly believe these income statements?'" said Jean-Marie Eveillard, who co-manages the $20 million First Eagle SoGen Gold Fund.
These are good times for managers like Eveillard, whose fund, he said, is up 30 percent this year following a 37 percent gain in 2001. That's a big contrast to the U.S stock market, which is down in 2002 following two annual declines.
Eveillard cited rumors that Japanese investors worried about their banking system also are buying gold.
"Some American pensions funds may be starting thinking it's a legitimate asset," he said.
That's a big contrast from recent years. After peaking above $800 an ounce in the 1980s, gold fell steadily over the last decade. Its role as an inflation hedge became questionable as futures markets developed other means of spreading risk. Central banks that once hoarded gold lowered reserves.
And with double-digit annual gains, stocks in the 1990s became the asset of choice.
Now the major indexes are not much above their Sept. 21 three-year lows.
Gold mining stocks, which have had big gains this week, pulled back Wednesday. Losers included Ashanti Goldfields (ASL: down $0.13 to $4.87, Research, Estimates) and Meridian Gold (MDG: down $0.44 to $12.92, Research, Estimates) Gold prices often jump in times of uncertainty, such as the Sept. 11 terrorist attacks and the market's meltdown in April 2000 and October 1998.
"It's kind of a defense move," said Amaury Conti, trader for U.S. Global Investors Conti said there's also optimism spreading that gold companies are not hedging, or selling, gold as much as they used to, lifting prices. 
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