Gold Resilient as This Year's Best Commodity as Stocks, Oil Wilt
Bloomberg - Feb 03, 2016
Gold climbed to a three-month high, helping propel Newmont Mining Corp. to its biggest gain in seven years, as mining shares rallied amid diminishing expectations for more U.S. rate increases.
Futures broke above the 200-day moving average, while an index of 14 gold producers tracked by Bloomberg Intelligence climbed to the highest since October. Holdings in exchange-traded funds backed by bullion grew for a 12th day, the longest run in three years.
Traders are betting on a less than 50 percent chance of a rate increase by the Federal Reserve this year, futures data compiled by Bloomberg show. Gold tends to fare well when rates are low as the metal only delivers returns through price gains. Expectations of a steeper trajectory of rate increases have been scaled back as turmoil reverberates in equity markets from Shanghai to New York.
“There’s been a confluence of factors supporting gold, one of which is the change in sentiment about how the Fed will proceed,†said Fiona Boal, a London-based director of commodity research at Fulcrum Asset Management, which oversees $3.7 billion. “On top of that, the rout we’ve seen in equity markets and in other commodities has made people nervous about the state of the global economy, with a greater allocation placed in gold.â€
Gold futures for April delivery gained 1.3 percent to settle at $1,141.30 an ounce at 1:45 p.m. on the Comex in New York. After the market closed, prices touched $1,146.20, the highest since Oct. 30. The metal surged past the 200-day moving average for the first time since Oct. 28.
