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Gold Bulls Back For First Time In Two Months

October 20, 2014

San Francisco (Oct 20)  Speculators added bullish gold bets for the first time in nine weeks as concern that global economic growth is slowing whipsawed equity markets.

The gain in the net-long position in New York gold futures and options snapped the longest run of reductions since 2010. Prices rose for a second week as global equities retreated to an eight-month low.

More than $3.2 trillion was wiped from the value of world shares this month as the International Monetary Fund cut its outlook for global growth in 2015. Federal Reserve policymakers identified slowing foreign economies as a risk to the U.S., spurring the fastest purchases of gold held through exchange traded products since July.

"In the last couple of weeks, it has become a lot clearer that when money is flowing out of all asset classes, it does not seem to be flowing out of the gold market," Eric Zoldan, a New York-based certified investment management analyst with JHS Capital Advisors, which oversees about $4 billion, said Oct. 16. "As the news flow continues to come out that the global economy and demand for things is deteriorating, it leads investors back to the asset class of gold."

Futures increased 1.4% to $1,239 an ounce on the Comex in New York last week, after a 2.4% gain in the prior week that was the biggest since June. They climbed an additional 0.5% Monday.

Gold surged 70% from December 2008 to June 2011 as global central banks increased money supplies on an unprecedented scale, spurring inflation concerns.

Source: NewsInvestors.com

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