Trump Angst Emboldens Gold Bulls to Run as Hedge Funds Pile InBy
Bullish bullion bets climb 37% in two weeks, most since 2007
More long positions likely added this week, BMO’s Wong says
The gold bulls are getting fractious again.
In the two weeks through the end of May, hedge funds and other large speculators boosted their bullish bets on the precious metal by 37 percent, the most since 2007, government data show.
More long positions are likely to be added this week, after a weak U.S. employment report on Friday, the London terror attacks on Saturday and ahead of former FBI Director James Comey’s testimony before a congressional panel this week, said Tai Wong, head of base and precious metals trading at BMO Capital Markets in New York.
Gold has rallied 11 percent this year amid mounting doubts that U.S. President Donald Trump will be able to push his pro-growth agenda through Congress. Political uncertainties are also bolstering haven demand for gold, outweighing expectations that the Federal Reserve will boost U.S. borrowing cost next week.
Bullion futures for August delivery gained 0.2 percent to settle at $1,282.70 an ounce at 1:41 p.m. on the Comex in New York, after touching $1,286, the highest for a most-active contract since April 21.
“The London attack over the weekend helped push gold above $1,280,” Wong said in an email. Comey’s testimony before a congressional panel on his investigation into the Trump campaign’s ties to Russia is also spurring political uncertainty, helping support gold prices, Wong said.
Silver also rose on the Comex, while platinum and palladium advanced on the New York Mercantile Exchange.