Citigroup raises price forecast for 2016 by 7.5 percent Holdings in gold-backed ETPs climb to highest in two months Share on Facebook Share on Twitter Gold climbed to the highest in more than a week and investors boosted holdings in bullion-backed funds as global market turmoil spurred demand for a haven. The metal rose as much as 1.3 percent in New York as commodities dropped and a gauge of world equities teetered on the brink of a bear market. Citigroup Inc. raised its forecast for gold prices this year, while cutting the outlook for crude oil and base metals. The cost of living in the U.S. dropped in December, while housing starts unexpectedly slumped, government data Wednesday showed. Gold fell for a third straight year in 2015 as the Federal Reserve signaled tighter monetary policy, curbing the allure of the metal because it doesn’t pay interest. Anxiety in financial markets over the outlook for global growth has prompted traders to push back bets on the next rate increase, with the odds of a March move at 23 percent, down from 51 percent at the end of December, Fed-fund futures show. “We have a lot of fear today that’s gathering steam,� James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview. “We definitely have some diversifying going on out of stocks and into fear trades, which is gold today. With the combination of a lack of inflation in the U.S. and the turmoil in the stock markets, there’s no other way to look at the Fed right now other than they’re on hold.� Gold Price Gold futures for February delivery gained 1.2 percent to $1,102.10 an ounce by 10:33 a.m. on the Comex in New York. Price are up 3.9 percent this year, the best performance of 22 raw materials on the Bloomberg Commodity Index. Citigroup raised its 2016 forecast by 7.5 percent to $1,070, the bank said in a report dated Tuesday. Gold holdings in exchange-traded products rose for the seventh time in eight sessions on Tuesday, to 1,511.8 metric tons, the highest since Nov. 6, data compiled by Bloomberg show. “The weakness in the global economy is causing people to rethink the likely path the Fed will take in tightening, and they’re now pricing one interest rate increase later in the year, rather than several.� said Jens Pedersen, an analyst at Danske Bank A/S in Copenhagen. Silverfutures slipped on the Comex, and platinum and palladium declined on the New York Mercantile Exchange.

Source