Gold traders most bullish in 10 weeks on stim­u­lus

The Pak Banker - - Front Page -

NEW YORK

Gold traders are the most bullish in 10 weeks and in­vestors are hoard­ing a record amount of bullion as cen­tral banks pledge to do more to spur eco­nomic growth.

Eigh­teen of 27 an­a­lysts sur­veyed by Bloomberg ex­pect prices to rise next week and five were bear­ish. A fur­ther four were neu­tral, mak­ing the pro­por­tion of bulls the high­est since Aug. 24. Hold­ings in gold-backed ex­change-traded prod­ucts gained the past three months, the best run since Au­gust 2011, data com­piled by Bloomberg show. They reached a record 2,588.4 met­ric tons yes­ter­day, val­ued at $142.1 bil­lion, the data show. Gold rose 70 per­cent as the Fed bought $2.3 tril­lion of debt in two rounds of quan­ti­ta­tive eas­ing from De­cem­ber 2008 through June 2011.

The Bank of Ja­pan (8301) ex­panded its as­set-pur­chase pro­gram on Oct. 30 for the sec­ond time in two months, in­creas­ing it by 11 tril­lion yen ($137 bil­lion). The Fed­eral Re­serve said last week it plans to continue buy­ing bonds and cen­tral banks from Europe to China have pledged more ac­tion to boost economies. Gold rose 70 per­cent as the Fed bought $2.3 tril­lion of debt in two rounds of quan­ti­ta­tive eas­ing from De­cem­ber 2008 through June 2011. "Cen­tral banks are all very con­cerned about a de­pres­sion, so they're keep­ing mone­tary poli­cies as loose as pos­si­ble," said Mark O'Byrne, the ex­ec­u­tive di­rec­tor of Dublin-based GoldCore Ltd., a bro­ker­age that sells and stores ev­ery­thing from quar­ter-ounce British Sov­er­eigns to 400-ounce bars. "Peo­ple are buy­ing gold as a store of value to pro­tect against cur­rency de­pre­ci­a­tion."

Gold rose 9.2 per­cent to $1,707.13 an ounce in Lon­don this year, head­ing for a 12th straight an­nual gain, the long­est win­ning streak in at least nine decades. The Stan­dard & Poor's GSCI gauge of 24 com­modi­ties lost 1.3 per­cent since the end of De­cem­ber, and the MSCI Al­lCoun­try World In­dex of eq­ui­ties climbed 11 per­cent. Trea­suries re­turned 1.9 per­cent, a Bank of Amer­ica Corp. in­dex shows.

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