Tuesday, 20 August 2013 00:00
-
- {{hitsCtrl.values.hits}}
REUTERS: Gold extended gains to a fourth session on Monday, hitting fresh two-month highs, helped by weak US data and further inflows into the world’s biggest bullion-backed exchange traded fund.
The metal has now risen for eight sessions out of nine, gaining 8% on the back of a weaker dollar, short covering and technical buying. Signs of increasing physical demand and a turnaround in the outflows from gold-backed ETFs have also supported prices.
“Last quarter what was tugging at gold prices was the fight between money managers who are very bearish on gold and physical buyers who were quite bullish,” said Joyce Liu, Investment Analyst at Phillip Futures in Singapore.
“The outlook (for gold prices) is slightly better now as it looks like we have bottomed out on the outflows.”
SPDR Gold Trust, the world’s largest gold-backed ETF, posted a 0.4% increase in holdings last week to 915.32 tons; its first increase since November 2012. The fund has seen about $ 19 billion in outflows this year, and has weighed heavily on gold prices that have lost nearly a fifth of their value in 2013.
Hedge funds and money managers raised net long positions in gold and silver, a report by the Commodity Futures Trading Commission showed on Friday, indicating that investors’ sentiment towards gold may be changing.
Spot gold rose 0.3% to $ 1,379.51 an ounce by 0305 GMT, after hitting a two-month peak of $ 1,384.10 earlier. Bullion climbed the most in five weeks last week, posting a 5% gain. Silver gained 14% - its biggest weekly increase in almost five years.
Liu said charts show that the momentum for gold prices is still positive.
Spot gold is expected to break a resistance at $ 1,386 per ounce and rise more to $ 1,403, Reuters Technicals Analyst Wang Tao said.
