LONG SWATTED, GOLDBUGS SWARM

Gold investors, the butt of jokes for decades as the metal lost its luster relative to stocks, were able to do some chortling late in the year.

Since Aug. 31, when InvestmentNews profiled Richard Sacks – perhaps the nation’s only adviser specializing in gold investments – the Philadelphia Gold and Silver Index has returned 40%. (And that’s with an ounce of gold still below $300.) All this while the stock market reeled from a string of late summer losses.

Of course, gold’s recent shine follows a nearly three-year free fall in which the index lost 68% of its value. But, hey, it’s a start.

Ever the optimist, Mr. Sacks, who runs Phoenix Advisory Co. Inc. in Northbrook, Ill., believes gold will move up in 1999. “A price of $300 per ounce would generate very significant gains in gold shares from present levels,” he says.

Other potentially positive signs he’s watching include possible gold purchases by China, reported increases in gold demand and a proposal before the newly formed European Central Bank to raise its gold reserves by $200 billion. Also, the European parliament has approved a measure to issue a 100-euro coin that would be made partly of gold.

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