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BookmarkGold was little changed after reaching a two-month high in New York on increased physical demand. Silver touched a three-month high.
Speculators’ net-bullish wager on gold-price gains rose 18 percent in the week to Aug. 13 as the contraction in short bets exceeded the drop in long positions, U.S. Commodity Futures Trading Commission data show. Silver futures rallied for seven days through Aug. 16 in the best run since January.
Gold fell 18 percent this year as some investors lost faith in the metal as a store of value, wiping $55.7 billion from the value of bullion-backed exchange-traded products. Gold is heading for a second straight monthly gain as this year’s slump spurred purchases of jewelry and coins, particularly in Asia. Global ETP holdings had the first weekly gain since February, increasing from a three-year low.
Gold is “rallying on the back of continued physical buying and short-covering,” or purchases to close out bets on price drops, William Adams, an analyst at FastMarkets Ltd. in London, wrote today in a report. “There is still room on the upside for bullion. We are wary of the next Federal Open Market Committee meeting in September, as that is likely to raise nervousness over quantitative-easing tapering.”
Futures Trading
Gold for December delivery added 0.1 percent to $1,372 an ounce by 7:45 a.m. on the Comex in New York. Prices reached $1,384.10, the highest since June 18. Futures trading volume was 26 percent below the average for the past 100 days for this time of day, according to data compiled by Bloomberg. Gold for immediate delivery in London fell 0.3 percent to $1,372.68.
Bullion may climb to $1,450 by the end of the year on rising physical demand across Asia, according to the median estimate of a Bloomberg survey of 11 traders, jewelers and analysts at the India Gold Convention in Jaipur on Aug. 16-17.
Gold ETP holdings rose 1 metric ton to 1,950.5 tons on Aug. 16, capping a 2.2-ton weekly gain, data compiled by Bloomberg show. Assets are down 26 percent this year as prices dropped on speculation that the U.S. Federal Reserve may taper asset purchases that helped gold cap a 12-year bull run last year.
“We saw a little bit of profit-taking” after prices rallied earlier today, Afshin Nabavi, a senior vice president at bullion refiner MKS (Switzerland) SA in Geneva, said by phone. “Physical demand is a little bit slower than last week because of the higher price level, but there is still some demand.”
Silver for December delivery reached $23.64 an ounce in New York, the highest since May 14, and was last down 0.4 percent at $23.27. It jumped 15 percent last week, the most since September 2008. Assets in silver-backed ETPs reached a record 19,967.8 tons on Aug. 16, data compiled by Bloomberg show.
Palladium for September delivery fell 1 percent to $755.70 an ounce. Platinum for October delivery declined 0.6 percent to $1,518 an ounce.
