GOLD UPDATES 18.06.2012:- LONDON: Gold traders are bullish for a fourth consecutive week after hedge funds added to bets that prices will rally, exchange-traded products backed by the metal expanded and Europe's debt crisis roiled markets.
Twenty-four analysts surveyed by Bloomberg said they expect gold to gain this week and six were bearish. A further three were neutral. Speculators boosted net-long positions by 27% in the week ended June 5, the latest Commodity Futures Trading Commission data show. ETP holdings rose 21.07 tonne valued at $1.03 billion since the start of June, halting a three-month retreat, according to data compiled by Bloomberg.
Greek voters returned to the polls June 17 after last month's elections failed to produce a government, increasing concern the 17-nation euro would fracture.
Almost $5.7 trillion was wiped off the value of global equities since the end of March on signs of slowing growth, spurring speculation that policymakers will do more to shore up economies. Gold rose about 70% as the Federal Reserve bought $2.3 trillion of debt in two rounds of quantitative easing, or QE, ending in June 2011.
"Whatever the outcome in Europe, it will likely be supportive for gold," said Neil Gregson, who manages about $6.9 billion of natural-resources equities at JPMorgan Asset Management in London. "We've still got the possibility of QE3 in the US, which would be good for gold."
Bullion futures climbed 3.7% to $1,625.50 an ounce on the Comex in New York this year, beating the 9.4$ drop in the Standard & Poor's GSCI gauge of 24 commodities and 1.4$ advance in the MSCI All-Country World Index of equities. Treasuries returned 1.8$, a Bank of America index shows. Gold has risen for 11 consecutive years, increasing about six-fold since the end of 2000.
The 10 most widely held options are for prices higher than now, with the biggest conferring the right to buy gold at $2,200 by next month and the second-largest at the same cost by November, according to Comex data.
Hedge funds and other speculators added 21,101 futures and options to their net-long position in the week through June 5, making them the most bullish since the start of May, according to CFTC data. Investors own 2,391.9 tonne in bullion-backed ETPS, within 0.8% of the record reached March 13, data compiled by Bloomberg show. The three-week gain in holdings is the longest expansion in about three months.
Central banks are also buying more metal after adding 456.4 tonne last year, the most in almost five decades, according to the London-based World Gold Council, which predicts another 400 tonne will be added in 2012. They increased their combined reserves for 14 consecutive months through March, the longest streak since 1964, International Monetary Fund data show. Kazakhstan's central bank said on June 13 it plans to buy 24.5 tonne this year to increase gold's share of its reserves. (NEAL BHAI 9999974733)
