In Commodity News 11/10/2016
Gold rebounded from its biggest weekly drop this year as the dollar eased and data showed investors jumped into exchange-traded funds backed by the metal, lifting global holdings to the highest since 2013.
Bullion for immediate delivery rose 0.4 percent to $1,262.50 an ounce by 11:04 a.m. in London, according to Bloomberg generic pricing. It sank 4.5 percent last week, the most since Nov. 6, as the case for buying gold against the stocks and bonds that offer yields for investors was undermined by increased bets on the U.S. Federal Reserve raising interest rates this year.
“For the time being we have seen enough on the downside,” David Govett, head of precious metals trading at Marex Spectron Group in London, said by e-mail. “All in all, gold really should not be down here, but the market seems to be blinded to real world issues by the never ending saga of ‘When will the Fed raise rates?’”
Holdings of ETFs backed by gold rose by 9.1 metric tons to 2,046.4 metric tons on Friday, the highest since 2013. Gold rallied 25 percent in the first half of the year as holdings surged.
The metal was also helped by a slide in the dollar since Friday as data showed the U.S. added 156,000 jobs in September, compared with a median forecast of 172,000 in a Bloomberg survey of economists, curbing the case for raising rates.
Goldman’s View
Goldman Sachs Group Inc. has said that a drop in gold prices significantly below $1,250 an ounce would present investors with a strategic buying opportunity, with the metal offering protection against risks to global growth and limits to central banks’ effectiveness.
As prices fell last week, traders cut bets on a rally by the most since late May. The net-long position in gold futures and options fell 22 percent to 205,176 for the week to Oct. 4, according to Commodity Futures Trading Commission data released three days later.
In other metals:
Silver climbed 1.4 percent, platinum added 0.5 percent and palladium advanced 0.6 percent.
Source: Bloomberg
