Tags: Gold | Global | Easing | Efforts

Gold Rises for First Time in 3 Days on Global Easing Efforts

Monday, 08 December 2014 03:20 PM

Gold futures rose for the first time in three days as signs that money supplies will increase in Europe and Asia revived investor demand.

Gold futures for February delivery climbed 0.4 percent to settle at $1,194.90 an ounce at 1:56 p.m. Monday on the Comex in New York. The price extended gains in electronic trading after the close as the dollar fell against the euro and U.S. equities dropped as much as 1 percent.

Trading was 38 percent below the 100-day average for this time, data compiled by Bloomberg show.

Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by the metal, climbed 0.5 percent last week, the most since August. Money managers raised their bullish wagers for a third straight week, the longest expansion since July, government data showed Dec. 5.

While European Central Bank policy makers refrained from increasing asset purchases at a meeting last week, President Mario Draghi pledged to assess the need for more stimulus early next year. China last month lowered interest rates to spur economic growth, while Japan has expanded its unprecedented stimulus program.

“Even though Draghi didn’t do anything in December, he’s determined to do something in the first quarter of 2015,” Tai Wong, the director of commodity products trading at BMO Capital Markets Corp. in New York, said in a telephone interview. “People are looking at easing in China and Europe, and the only place that’s looking at tightening is the U.S., and no one is really sure when they’ll get there.”


The moves “seem to have triggered a small gold rally back above $1,200,” Wong said.

Bullish Wagers

Speculators increased their net-long position rose by 20 percent to 79,497 futures and options in the week ended Dec. 2, the highest since Aug. 26, according to U.S. Commodity Futures Trading Commission data. Holdings more than doubled in three weeks.

Prices dropped to a four-year low of $1,130.40 on Nov. 7 amid speculation that gains for the U.S. economy will prompt the Federal Reserve to raise interest rates, cutting the appeal of inflation hedges.

Employers in the U.S. added 321,000 jobs last month, the most since January 2012, the government said Dec. 5. Futures fell as much as 1.8 percent after the report, before paring losses to settle 1.4 percent lower. Some investors have closed bearish bets as prices fell less than expected on the jobs data, Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said by telephone.

Federal Reserve Bank of Atlanta President Dennis Lockhart said in a speech Monday that the central bank should wait to begin raising rates from near zero percent because a reversal would hurt Fed credibility.

Silver futures for March delivery gained 0.1 percent to $16.276 an ounce on the Comex.

On the New York Mercantile Exchange, platinum futures for January delivery advanced 0.8 percent to $1,229.40 an ounce. Palladium futures for March delivery fell 0.6 percent to $797.80 an ounce.

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Gold futures rose for the first time in three days Monday as signs that money supplies will increase in Europe and Asia revived investor demand.
Gold, Global, Easing, Efforts
Monday, 08 December 2014 03:20 PM
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