Gold Hits Three-Month High as Speculators Increase Bullish Bets
By Eddie Spence | Bloomberg.com
(Bloomberg) — Gold rose to a three-month high as weaker bond yields added to the metal’s allure amid signs bullion investors are turning more positive.
Hedge fund managers increased their net-long gold position to the highest in three months, data showed Friday. Meanwhile, data compiled by Bloomberg show exchange-traded fund investors have bought bullion for the past six days, following months of sales.
Prices have rebounded from lows set in March as the dollar retreated and the Federal Reserve signaled it will keep interest rates low amid an uneven economic recovery, even with rising inflation expectations. Gold edged higher Monday as Treasury yields extended declines in the wake of Friday’s U.S. retail sales data that missed expectations.
“Gold has been out of favor for a while, but the uptrend during the past six weeks combined with rising breakevens and lower real yields have supported renewed demand both from money managers in futures and from investors in general through ETFs,” said Ole Hansen, head of the commodity strategy at Saxo Bank A/S.
Spot gold rose 0.5% to $1,853.12 an ounce by 10 a.m. in London, after reaching the highest since Feb. 10. Silver, platinum, and palladium also gained. The Bloomberg Dollar Spot Index was steady.
Gold’s gains have taken it past its 200-day moving average. Prices could climb to $1,878 if it surpasses resistance at $1,858, Hansen said.