- Precious metal should continue to rally, BMO’s Wong says
- Investors sought haven assets as Brexit causes jitters
Gold prices posted a third straight weekly gain, and at least one measure shows that the rally may still have further to run.
Open interest, a tally of outstanding contracts in Comex futures, rose to the highest in almost a month. The debate over whether the U.K. should exit from the European Union has dominated trader discussions, boosting demand for haven assets. Gold prices touched the highest in almost two years on Thursday, before a halt in campaigning on the U.K. vote eroded gains.
The metal has jumped 22 percent this year, fueled by speculation that interest rates in the U.S. will remain lower for longer. Global central bankers have sounded alarms over risks to economies from Brexit, and the Federal Reserve signaled Wednesday that fewer officials expect the central bank to raise rates more than once this year. Low rates are a boon for bullion, which doesn’t offer yields.
“Gold was rallying before Brexit became a significant possibility, and should continue to do so,” said Tai Wong, director of commodity products trading at BMO Capital Markets in New York.
Gold futures for August delivery lost 0.3 percent to settle at $1,294.80 an ounce at 1:43 p.m. on the Comex in New York. Prices pared gains Thursday after the killing of a U.K. lawmaker fueled speculation the nation’s voters will more likely favor remaining in the EU. The metal climbed 1. 5 percent his week in the longest rally in four months.
Holdings in exchange-traded funds backed by gold rose for a 13th day. Assets increased 4.2 metric tons to 1,887 tons as of Thursday, the highest since October 2013, data compiled by Bloomberg show. Silver ETFs extended a record to 20,232 metric tons.
- Silver futures slipped on the Comex, while palladium and platinum futures declined on the New York Mercantile Exchange.