Gold Funds Getting Rewarded as Prices Touch Seven-Month High

Gold Prices Surge as Stocks Selloff
  • Holdings in exchange-traded funds have risen for 15 days
  • Index of gold-company shares advances as much as 5.5%

With stock and bond markets in turmoil, investors are pushing more money into gold.

Bullion holdings in exchange-traded products have climbed for 15 consecutive days, the longest run since September 2012, according to data compiled by Bloomberg. The metal, considered a safe haven, is benefiting from worries about the health of China’s economy, plunging oil prices and uncertainty over U.S. interest rates. Gold climbed to the highest in seven months. The 30-company Philadelphia Stock Exchange Gold & Silver Index of shares rose as much as 5.5 percent.

Gold is the best asset in the Bloomberg Commodity Index this year, rising 13 percent. Bullion has also gotten a boost from global equity turmoil that lifted demand for haven assets. The Standard & Poor’s 500 Index declined as much as 2.5 percent on Monday, as U.S. shares joined a retreat in European and emerging-market stocks.

“Gold’s on the move today,” Phil Streible, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. “A sharp selloff in equities is further causing a flight to quality and it shows you China is a lot shakier than last week.”

Gold futures for April delivery jumped 3.3 percent to $1,195.50 an ounce at 11:20 a.m. on the Comex in New York. Prices earlier touched $1,199.70, the highest since June 22.

Holdings in gold-backed ETPs rose 0.5 percent to 1,555.4 metric tons as of Friday, according to data compiled by Bloomberg.

  • Volumes were higher than average, with Comex trading 66 percent above the 100-day average for the time of day.
  • Silver futures for March delivery added 3.8 percent to $15.34 an ounce. On the New York Mercantile Exchange, platinum and palladium also gained.
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