BLBG; Gold Advances in Asia as Investors Bet on Rally to Record
By Kim Kyoungwha
June 14 (Bloomberg) -- Gold advanced for a second straight session on speculation that demand for haven investments will drive the metal to a record.
Gold for immediate delivery gained as much as 0.5 percent to $1,232.70 an ounce and was at $1,230.60 an ounce at 1:32 p.m. in Singapore. The metal reached a record $1,252.11 on June 8.
“There is still so much money looking for safer investments, with growing interest in gold due to the prospect of higher prices,” said Hwang Il Doo, a senior trader with KEB Futures Co. “I expect gold to resume its rally to a record.”
Gold has climbed 12 percent this year as the euro tumbled 15 percent against the dollar on concern that the region’s fiscal crisis will hamper a global economic recovery. Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, grew to a record 1,306.14 tons last week, according to the company’s website.
Hedge-fund managers and other large speculators increased their net-long position in New York gold futures in the week ended June 8, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will increase, outnumbered short positions by 227,398 contracts on the Comex division of the New York Mercantile Exchange, the Washington- based commission said in its Commitments of Traders report. Net- long positions rose by 2,852 contracts, or 1 percent, from a week earlier.
“Gold may continue rising on follow-through strength,” said Wong Eng Soon, a Singapore-based analyst with Phillip Futures Pte. “Investment demand for gold will provide support for prices amidst uncertainty in the uneven economic recovery.”
Debt Measures
Bullion is headed for its 10th annual advance, the longest winning streak since at least 1920. It has rose amid speculation that debt-cutting measures by European nations will slow growth. Seventeen of 25 traders, investors and analysts surveyed by Bloomberg said gold will rise this week, five forecast lower prices and three were neutral.
The precious metals complex has continued to “benefit from persistence in the safe-haven trade and risk reallocation,” Hussein Allidina, New York-based head of research with Morgan Stanley, wrote in a report.
The bank “continues to like the outlook in the coming months amid low global interest rates and an unresolved eurozone debt turmoil,” Allidina said. “We expect prices to rise on a quarterly average basis for the rest of the year.”
Silver increased 0.7 percent to $18.38 an ounce, platinum gained 1 percent to $1,556.45 an ounce and palladium climbed 1.3 percent to $454.38 an ounce.
To contact the reporter on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net
