Gold Posts Biggest Monthly Gain in Four Years on Haven Demand

Gold on Pace for Best Monthly Gains Since 2012
  • Bullion-backed ETP holdings rise to highest since October 2014
  • Bets that U.S. rates will stay low add to gold's appeal

Gold advanced, posting the biggest monthly gain in four years, as demand for haven assets spurs buying in bullion-backed funds.

Holdings in the SPDR Gold Shares, the world’s largest exchange-traded fund backed by the metal, climbed to the highest since March on Friday. SPDR has attracted $4.55 billion of new money in 2016, the most among all U.S.-listed ETFs, according to data compiled by Bloomberg as of Feb. 28. Money managers boosted their net-long positions to the highest in a year, U.S. data showed last week.

Bullion prices have rallied 16 percent this year, topping gauges of high-yield and investment-grade corporate bonds, U.S. treasuries, currencies and major stock indexes, as global growth concerns spur demand for the metal as a haven. Speculation that the U.S. Federal Reserve will be slow to tighten monetary policy further has also boosted the appeal of gold, which doesn’t pay interest.

“The news of people moving to gold and gold assets is certainly supportive,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said in a telephone interview. “It’s the uncertainty and fear out there that drives people to gold.”

Gold futures for April delivery climbed 1.1 percent to settle at $1,234.40 an ounce on the Comex in New York. The metal has gained about 11 percent this month, the biggest such increase since January 2012.

“With rates expected to be lower for longer in the U.S., negative rates in countries like Japan and a drop in global stock markets, you’re incentivized to put your money into gold,” Bernard Dahdah, a commodities analyst at Natixis SA in London, said by phone.

In other metals:

  • Silver futures rose on the Comex in New York, posting a second straight monthly gain.
  • Palladium and platinum advanced on the New York Mercantile Exchange.
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