Sun, Apr 16, 2017 - Page 14 News List

Gold rally gets feverish as trader survey flashes extreme level on political worries

Bloomberg

Gold investors are getting behind this rally.

Prices have climbed back to the highest level since November last year on growing worries about everything from North Korean nuclear tests to faster US inflation and French election results.

Bullion has risen about 12 percent so far this year.

In a Bloomberg survey this week, traders and analysts were the most positive on gold since December 2015.

Another bullish sign, prices have climbed above the 200-day moving average and Britain’s Royal Mint said bullion purchases jumped 20 percent in the first quarter of this year.

“The animal spirits were asleep, but they’re waking up again,” Mark O’Byrne, a director at broker GoldCore Ltd in Dublin, said by telephone. “We have all these latent threats that have been around for a while, [US President Donald] Trump, European elections, Brexit and they’re all just becoming a little more acute.”

Gold futures for June delivery on Thursday rose 0.8 percent to settle at US$1,288.50 an ounce as of 1:43pm on the Comex in New York. The contract is up 2.6 percent from last week’s US$1,256.10.

The exchange was closed on Friday for the Good Friday holiday.

O’Byrne said prices could run to US$1,400 an ounce by the end of the year.

The latest leg-up came after Trump declared a preference for a weaker US dollar and France’s right-wing candidate Marine Le Pen led in polls before the first round of presidential elections.

The Credit Suisse Fear Barometer this week neared an all-time high as the list of economic and political concerns grow.

The index measures the cost of buying protection against declines in the S&P 500 index.

In the Bloomberg weekly survey, 14 respondents reported a bullish view, compared with one bear and two neutral.

Other precious metals:

Silver futures for May delivery rose 1.1 percent to US$18.55 an ounce. The contract is up 2 percent for the week.

Platinum futures for July delivery gained 1 percent to US$977.40 an ounce.

Palladium futures for June delivery lost 0.1 percent to US$795.90 an ounce.

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