Gold Assets in Biggest ETP Surge Most Since 2010 on Haven Buying

New York (Jan 17)  Holdings in the SPDR Gold Trust, the biggest exchange-traded product backed by the metal, surged the most in more than four years.

Assets in the SPDR fund, which counts billionaire John Paulson as its biggest holder, jumped 1.9 percent to 730.89 metric tons on Jan. 16. That’s the biggest gain since May 25, 2010. This week the holdings climbed 3.3 percent.

Gold futures capped the biggest weekly gain in 18 months as volatility in European currency markets spurred demand for the metal as a haven. Prices climbed following the Swiss central bank’s surprise move to abandon the franc’s cap against the euro.

“People are aggressively going back to gold,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “With all the currency turmoil in Europe and worries about the euro declining further, many investors are moving into the world’s oldest currency.”

Gold climbed to a four-month high on Friday, while call options for the right to own February futures at $1,300 an ounce soared sevenfold in two days. Signs of cooling expansion in Europe boosted speculation that policy makers will add to stimulus, increasing demand for a store of value. Muted inflation and stagnant foreign economies may prompt the Federal Reserve to delay an increases in interest rates.

In New York, gold futures for February delivery rose 1 percent to settle at $1,276.90 an ounce at 1:38 p.m. on the Comex. Earlier, the price reached $1,282.40, the highest for a most-active contract since Sept. 2. This week, the metal jumped 5 percent, the most since July 12, 2013.

Source: Bloomberg