Gold surged to a record, boosted by increasing optimism the Federal Reserve will start easing monetary policy this year and by rising geopolitical tensions in the Middle East.
Bullion jumped as much as 1.4% to hit $2,450 an ounce in Asia on Monday, surpassing a previous intraday high reached in April. Traders have been boosting bets in recent sessions that the Fed may reduce borrowing costs as early as Sept – a scenario that would bolster gold since it doesn’t pay interest.
Last week, the US dollar fell and Treasuries rallied after data released on Wednesday showed inflation in April eased more than expected.That offered support for the precious metal, which is priced in the greenback.
Hedge funds trading Comex futures boosted bullish bets on gold to a three-week high in the week ending May 14, according to data from the Commodity Futures Trading Commission. The gains suggest that bullion has broken out of what’s been a fairly narrow trading range in recent weeks amid a lack of clarity over the US rate path. Prices are almost 20% higher this year.
Gold’s strength has been linked to central-bank purchases, robust demand from Asia and elevated geopolitical tensions in Ukraine and the Middle East. Silver climbed to the highest since Dec 2012 after a strong rally Friday was helped by spillover sentiment in wider physical metals markets, where tightening supply has spurred investor demand for materials such as copper.
Bullion jumped as much as 1.4% to hit $2,450 an ounce in Asia on Monday, surpassing a previous intraday high reached in April. Traders have been boosting bets in recent sessions that the Fed may reduce borrowing costs as early as Sept – a scenario that would bolster gold since it doesn’t pay interest.
Last week, the US dollar fell and Treasuries rallied after data released on Wednesday showed inflation in April eased more than expected.That offered support for the precious metal, which is priced in the greenback.
Hedge funds trading Comex futures boosted bullish bets on gold to a three-week high in the week ending May 14, according to data from the Commodity Futures Trading Commission. The gains suggest that bullion has broken out of what’s been a fairly narrow trading range in recent weeks amid a lack of clarity over the US rate path. Prices are almost 20% higher this year.
Gold’s strength has been linked to central-bank purchases, robust demand from Asia and elevated geopolitical tensions in Ukraine and the Middle East. Silver climbed to the highest since Dec 2012 after a strong rally Friday was helped by spillover sentiment in wider physical metals markets, where tightening supply has spurred investor demand for materials such as copper.
