Gold rose above $900 a troy ounce on Monday, hitting a three and a half month high and posting record highs in euro and sterling terms as investors sought safe haven from troubled equities markets and expensive government bonds.
Precious metals traders said that investors, particularly in Europe, were pouring money into gold exchange traded funds – a popular way to gain access to the metal – and also buying physical gold, from coins to large bars.
“Effectively what we are seeing is safe haven buying,” said one London-based trader.
The total amount of gold held by the world’s gold ETFs last week rose above 40m ounces for the first time, consolidating the investment vehicles as the largest holders of physical gold after the official reserves of the US, Germany, the International Monetary Fund, France and Italy.
John Reade, a precious metal strategist at UBS in London, said that the month-on-month change in ETF gold holdings stood at an “impressive” 2.5m ounces. But he pointed that the increase was still much less than the rate of 6m ounces achieved in mid-October, when investors rushed for cover into the precious metal.
In London, spot gold rose to $905.85 an ounce, up from New York’s last quote on Friday at $898.40. The precious metal hit an all-time high in sterling terms at £656.85 an ounce. In euros, it hit a record high at €700.54 an ounce.
Traders said that gold was likely to consolidate above $900 an ounce this week and could test the $930 an ounce level last touched in October. Spot gold in London, the market’s benchmark, hit an all-time high of $1,030.80 last March.
Deutsche Bank’s commodities strategists last week said that the eventual US stimulus plan would weaken the dollar to support gold in the first half of the year.
“We have forecast gold prices to continue to rise through the second quarter, culminating in an average that quarter of $975/oz, though would not be surprised to see spikes past the $1,000 mark,” they said.
Other commodities markets were on the positive side, with oil posting gains above $48 a barrel and agricultural and soft raw materials rising further.
In London mid-morning trading, ICE March Brent rose 27 cents to $48.64 a barrel while Nymex March West Texas Intermediate rose 31 cents to $46.78 a barrel.
Base metals were mixed, with copper up 1.9 per cent to $3,353 a tonne and aluminium down 0.6 per cent to $1,347 a tonne.
In the agricultural and soft commodities market, cocoa in London hit a fresh 24-year high at £2,013 a tonne, up 0.7 per cent on the day. ICE March raw sugar was 0.7 per cent higher at 12.79 cents a pound as the market awaited news about duty-free sugar imports into India, one of the world’s largest consumers.
Soyabean, wheat and corn posted gains of about 1.0-1.5 per cent on the back of a drought in Brazil and Argentina, two of the world’s largest producers of grains and vegetable oil.
FT
Precious metals traders said that investors, particularly in Europe, were pouring money into gold exchange traded funds – a popular way to gain access to the metal – and also buying physical gold, from coins to large bars.
“Effectively what we are seeing is safe haven buying,” said one London-based trader.
The total amount of gold held by the world’s gold ETFs last week rose above 40m ounces for the first time, consolidating the investment vehicles as the largest holders of physical gold after the official reserves of the US, Germany, the International Monetary Fund, France and Italy.
John Reade, a precious metal strategist at UBS in London, said that the month-on-month change in ETF gold holdings stood at an “impressive” 2.5m ounces. But he pointed that the increase was still much less than the rate of 6m ounces achieved in mid-October, when investors rushed for cover into the precious metal.
In London, spot gold rose to $905.85 an ounce, up from New York’s last quote on Friday at $898.40. The precious metal hit an all-time high in sterling terms at £656.85 an ounce. In euros, it hit a record high at €700.54 an ounce.
Traders said that gold was likely to consolidate above $900 an ounce this week and could test the $930 an ounce level last touched in October. Spot gold in London, the market’s benchmark, hit an all-time high of $1,030.80 last March.
Deutsche Bank’s commodities strategists last week said that the eventual US stimulus plan would weaken the dollar to support gold in the first half of the year.
“We have forecast gold prices to continue to rise through the second quarter, culminating in an average that quarter of $975/oz, though would not be surprised to see spikes past the $1,000 mark,” they said.
Other commodities markets were on the positive side, with oil posting gains above $48 a barrel and agricultural and soft raw materials rising further.
In London mid-morning trading, ICE March Brent rose 27 cents to $48.64 a barrel while Nymex March West Texas Intermediate rose 31 cents to $46.78 a barrel.
Base metals were mixed, with copper up 1.9 per cent to $3,353 a tonne and aluminium down 0.6 per cent to $1,347 a tonne.
In the agricultural and soft commodities market, cocoa in London hit a fresh 24-year high at £2,013 a tonne, up 0.7 per cent on the day. ICE March raw sugar was 0.7 per cent higher at 12.79 cents a pound as the market awaited news about duty-free sugar imports into India, one of the world’s largest consumers.
Soyabean, wheat and corn posted gains of about 1.0-1.5 per cent on the back of a drought in Brazil and Argentina, two of the world’s largest producers of grains and vegetable oil.
FT
