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OceanaGold stocks jumps 20%

Thursday 18th September 2008

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OceanaGold Corp., operator of New Zealand's biggest gold mine, jumped 20% on the NZX as a weakened global finance industry spurred demand for the precious metal as a haven.

The stock rose 9 cents to 54 cents. The company pared its slump this year to 90%. Gold rose 2.4% to US$884.25 an ounce, building on an 11% jump yesterday.

The US federal government's rescue of American International Group didn't allay fears in the financial markets. Stocks have tumbled in Asia. Macquarie Group in Australia had a record one-day drop after its debt rating outlook was changed to negative.

"With gold it's the outright flight to safety that's punching it around," said Chris Tennent-Brown, economist at CBA New Zealand.

Gold had its biggest gain in 26 years. Farm commodities, that bolster New Zealand's export returns, haven't been in on the rally. The CBA NZ Commodity Price Index fell 3.6% in the past week, in U.S. dollars. Skim milk powder prices dropped to $2,900 per metric ton for the first time since December 2006.

Tennent-Brown said a weakening New Zealand dollar is "starting to work in the favour of commodity prices at long last."

By Jonathan Underhill

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