Gold Gains on Signs of Hedge Fund Buying as Barrick Shares Jumpby
Gold rose on speculation that continued volatility in financial markets this year will bring the metal back into fashion after signs of increased buying by hedge funds.
The funds and other money managers more than doubled their net-long positions last week amid a reawakening among investors seeking haven assets. Barrick Gold Corp., the world’s largest producer of the metal, climbed as much as 9.2 percent in Toronto. The shares headed for a fourth straight gain, the longest streak since August.
Gold is heading for its biggest monthly rally in a year. Equities were off to the worst start to a year since 2009 as worries mounted that a global slowdown would hurt U.S. growth. Adding to economic concerns, a blizzard this past weekend dumped more than 2 feet (61 centimeters) of snow in parts of the East Coast and brought the region to a standstill. The Federal Reserve’s first policy meeting of 2016 is scheduled for Jan. 26-27.
“Gold is finally appearing on the radar of fund managers,” George Gero, the vice president of global futures at RBC Capital Markets, said in a telephone interview. “Probably because of the weather, the Fed is going to be more dovish than expected as this horrible snow storm, which hit the entire East Coast, will have an economic impact.”
Gold futures for February delivery added 0.8 percent to $1,105.30 an ounce at 1:38 p.m. on the Comex in New York, the first gain in three sessions.
* Gold denominated in euros climbed to the highest since November after the European Central Bank announced stimulus measures last week
* Fed-fund futures show no chance of an interest-rate increase when officials meet this week
* "The focus will be if the policy members will talk down the possibility of further rate hike," Naeem Aslam, chief market analyst at Avatrade Ltd. in Dublin, said in an e-mailed note
* Silver futures for March delivery climbed 1.4 percent to $14.254 an ounce. On the New York Mercantile Exchange, platinum gained, while palladium dropped