Gold traders are the most bullish in three weeks after hedge funds boosted their wagers on higher prices amid speculation Europe’s debt crisis and slow U.S. growth will spur demand for the metal as a protection of wealth.
Twenty-eight of 32 people surveyed by Bloomberg expect bullion to rise on the Comex in New York next week, the most since Oct. 14 and the second increase in a row. Money managers boosted their combined net-long position in New York gold by 8.7 percent in the week to Oct. 25, U.S. government data show. Traders expect lower copper and raw-sugar prices next week, and gains in corn and soybeans, separate surveys showed.
Gold climbed above $1,760 an ounce this week for the first time in six weeks and investors increased their holdings in gold-backed exchange-traded products to a two-month high. Federal Reserve Chairman Ben S. Bernanke signaled more monetary stimulus may be needed to cut unemployment, while the European Central Bank yesterday unexpectedly lowered interest rates.
“The conditions are perfect” for gold, said Mark O’Byrne, the Dublin-based executive director of GoldCore Ltd., a brokerage that offers investors quarter-ounce British Sovereigns up to 400-ounce gold bars. “We have unprecedented levels of risk in markets. We still have ultra-loose monetary policy and the debasing of currencies. That’s obviously bullish for gold.” (more)
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