Gold climbs to six week high

  • Share via facebook
  • Tweet this
  • Bookmark and Share
(Getty Images - Photo for illustrative purpose only)

(Getty Images - Photo for illustrative purpose only)

Gold climbed to its highest in nearly six weeks on Monday as a dip in equities lifted the metal's safe-haven appeal and improved investor confidence.

Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 7.49 tonnes to 797.05 tonnes on Friday - the first increase in a month.

Data from the Commodity Futures Trading Commission also showed on Friday that hedge funds and money managers raised their bullish bets in gold and silver futures and options for a third week amid a decline in stocks.

Spot gold hit $1,259.46 an ounce early in Asian trading - its highest since Dec. 11. By 0333 GMT, it had dropped back to $1,255.14, still up 0.1 percent.

The metal, often seen as an alternative investment option, has posted four straight weeks of gains - adding 4.2 percent to its value - on increasing optimism about a global economic recovery. Last year, gold dropped 28 percent.

"A lot of our clients are still holding onto gold as a risk-event hedge," said Danny Laidler, head of ETF Securities' Australia and New Zealand business.

"I think the worst of the outflows is behind us. We think there is a greater potential for modest gains (in gold prices) this year than for a downside risk," Laidler said.

Prices were finding a floor near $1,200 as that was close to the cost of production, he added.

If gold prices were to fall below the cost of production, producers would be forced to shut loss-making mines, thereby creating a supply constraint that could push prices up.

Among other precious metals, spot platinum gained after the main trade union for South African platinum miners said the workers will strike this week at the world's top three producers, hitting over half of global output.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Features & Analysis
Petroleum producers shift attention from Middle East: Kemp

Petroleum producers shift attention from Middle East: Kemp

Following four decades of war, sanctions, nationalisation and...

Gold industry shifts east as Dubai plans huge refinery

Gold industry shifts east as Dubai plans huge refinery

$60m refinery being built by Kaloti Precious Metals in Dubai...

Dubai gold dealers shun Turkish bars on fear of links to Iran

Dubai gold dealers shun Turkish bars on fear of links to Iran

Trade in Turkish gold bars to Iran via Dubai is drying up as...

2
Most Discussed