BLBG:Gold Advances to Two-Month High on Investment, Physical Demand
Gold rose to a two-month high after holdings in the largest exchange-traded product posted the first weekly expansion this year. Silver headed for the longest rally since March 2008.
Spot gold gained as much as 0.6 percent to $1,384.55 an ounce, the highest since June 18, and traded at $1,382.45 at 10:05 a.m. in Singapore. Silver added 1.6 percent to $23.6225 an ounce, the highest since May 14, after entering a bull market last week.
Gold increased 4.8 percent last week, the most since the five days to July 12, as holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, capped a weekly gain for the first time this year. Global bar and coin purchases reached a record last quarter and jewelry usage rose to the most since 2008 after prices slumped into a bear market in April, World Gold Council figures showed last week. U.S. Commodity Futures Trading Commission data show bets on lower prices fell.
“Sentiment toward gold is turning more positive as evidenced by the SPDR and CFTC data,” Sun Yonggang, a macroeconomic strategist at Everbright Futures Co., said from Shanghai. “While the World Gold Council data merely confirmed what we knew, it shows that there are still people out there interested in owning gold.”
Gold is still 18 percent lower this year on speculation that the U.S. Federal Reserve may taper asset purchases that helped gold cap a 12-year bull run last year. Investors lost faith in the metal and sold gold from ETPs backed by bullion at a record pace, with assets in the SPDR shrinking 32 percent.
CFTC Positioning
Bullion for December delivery rose as much as 1 percent to $1,384.10 an ounce on the Comex in New York, the highest since June 18, before trading at $1,377. The net-long position rose 18 percent to 56,604 futures and options by Aug. 13, as the 17 percent drop in short bets exceeded the 3 percent fall in long wagers, CFTC data show.
Silver for immediate delivery traded at $23.558 an ounce, gaining for a ninth day after ending 13 percent higher last week for the biggest weekly gain since September 2008. Silver’s 14-day relative strength index was above the level of 70 that indicates to some analysts who study technical charts that a decline may be imminent.
Spot platinum fell 0.3 percent to $1,520.70 an ounce after capping a sixth weekly increase last week, the longest such run since February 2012. Palladium fell 0.2 percent to $760.85 an ounce, after last week gaining for a third week.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: Jake Lloyd-Smith at jlloydsmith@bloomberg.net
