Message: Gold Demand Remains High

Gold Bull’s bets hit US$131-B, demand Strong

Gold players are the most Bullish in 4 months after investors accumulated more of the precious Yellow metal than ever and hedge funds raised bets on gains to a 5-month high.

16 of 23 analysts surveyed expect prices to gain this week and 1 was Neutral, the highest proportion since 11 November.

Investors increased their holdings in exchange traded products backed by Bullion for 7 consecutive weeks and now hold 2,407 metric tons valued at US$131-B, data show.
Demand for Gold is strengthening as European leaders seek to contain the region’s debt crisis and governments from the US to the UK. keep interest rates at all-time lows to maintain and boost growth.

The Federal Reserve and Bank of England have bought debt and the European Central Bank offered unlimited 3-yr loans to the region’s lenders, actions that spurred some investors to buy Gold as protection against inflation.

Gold rose 9.3% to 1,711.90 oz this year on the Comex in New York, heading for a 12th annual advance. That compares with a 9.5% rise in the Standard & Poor’s GSCI gauge of 24 commodities and a 10% appreciation in the MSCI All-Country World Index (MXWD) of equities. Treasuries fell 0.5%, a Bank of America Corp. index (MXWD) shows.

Hedge funds and other money managers increased bets on higher Gold prices by 10% to 197,552 futures and options in the week ended 28 February, the highest level since 6 September, Commodity Futures Trading Commission data show. The CFTC will publish the latest data late Saturday.

The most-traded options on 7 March were call options giving owners the right to buy Gold at 1,900 and 1,850 oz by 25 April, data from the Comex show. The most widely held contract confers the right to buy at 2,200 oz by 26 July. Stay tuned…

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.


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