Gold Climbs to Six-Month High as Crimea Vote Boosts Haven Demand

Discussion in 'Commodities Forum' started by Stacked, Mar 17, 2014.

  1. Stacked

    Stacked Active Member

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    Gold advanced to the highest level in more than six months, extending the longest weekly rally since August 2011, after a referendum in Crimea to leave Ukraine and join Russia boosted demand for a store of value.

    Bullion for immediate delivery rose as much as 0.7 percent to $1,392.22 an ounce, the highest level since Sept. 9, and was at $1,386.87 at 7:49 a.m. in Singapore, up for a fifth day. The metal capped a sixth weekly increase last week, as holdings in exchange-traded products expanded to the highest this year.

    Gold advanced 15 percent this year as turmoil in Ukraine and slowing growth in China, the largest consumer, increased demand for a protection of wealth.

    Assets in bullion-backed ETPs increased for a third week to 1,766.4 metric tons, the most since Dec. 27, data compiled by Bloomberg show, after a record contraction last year. The metal rebounded from the biggest annual decline since 1981 even as the U.S. Federal Reserve, which next meets March 18-19, reduced asset purchases.

    “Geopolitical tension has propelled gold higher, with CFTC and ETF positioning showing that investors have turned more positive on gold,” Sun Yonggang, a macroeconomic strategist at Everbright Futures Co., said from Shanghai. “Gold’s advance this week may be limited by the Fed, which is expected to continue to cut bond buying.”

    Gold for April delivery added as much as 1 percent to $1,392.60 an ounce on the Comex in New York, the highest intraday level for a most-active contract since Sept. 9. The net-long position in gold rose 4 percent to 123,007 futures and options in the week ended March 11, the most since December 2012, U.S. Commodity Futures Trading Commission data show. Short holdings fell 20 percent to 21,073, the lowest since October.
     
  2. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I always keep some gold in my portfolio. I like GLD for exposure without having to gamble on where it may or may not be in the near future, or to have to actually store physical gold or worry about liquidity if I ever need the $.
     
  3. SteakTartare

    SteakTartare Senior Investor

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    Interesting article, thanks for posting it. I've always been a big fan of precious metals (PMs) and keep a decent percentage of my portfolio in said. I'm glad I got into it heavily in the early 2000s before the prices went nuts. With the goings on in Eastern Europe, it will be interesting to see what the PM market does this year.
     
  4. Mr.Robinson

    Mr.Robinson Member

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    I've seen gold as a safe heaven.
    Probably not because of my "knowledge" in trading, but rather from what I've seen from "tradition". Gold is gold, it doesn't rust.
    However, last year I've lost about 10k as I had bought some huge amount at the first day of the terrible decline and sold it after a few months for some considerable loss, as I was expecting it to fall some more -and it did.
    And now I see that it has reached another high...
    But it has started to go down again.

    I think gold is becoming even less predictable than the stock markets.
     
  5. TomRalphio

    TomRalphio Member

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    Considering gold is rebounding again, especially in the Asian markets - recent changes may be just a temporary change in things .
     
  6. JR Ewing

    JR Ewing Super Moderator Staff Member

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    It certainly can be highly volatile.
     

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