• Gold advanced to an eight-week high on Monday in relatively brisk holiday trading in the US after government data showed hedge funds increasing bullish bets for the first time in nine weeks.
• Gold for delivery in February, the most active contract on the Comex market in New York, hit a high of $1,208.70 in early dealings, up 1% from Friday's close before giving up some of those gains. If the metal manages to close above the psychologically important $1,200 an ounce level it would be the first time since November 22.
• After relentless cutting back of bullish bets hedge funds or so-called managed money investors in gold futures and options grew their long positions – bets that gold will trade higher in future – by 57% last week.
Derivatives traders added to longs and cut back shorts – bets that gold can be bought back cheaper in future – lifting the net position to 5.4 million ounces from one year-lows hit at the beginning of 2017 trading.
• Credit Suisse is upbeat about the potential for gold-mining stocks this year, based on its forecast for higher gold prices and the reduced debt load held by producers.
“We are positive on gold equities in 2017,” said Credit Suisse. Factors cited by analysts include the fact gold near $1,200 an ounce is still below Credit Suisse’s 2017 average price forecast of $1,338, with January returns averaging plus 5% over the last five years, and improved fundamentals for producers, with net debt down 23% year-on-year.
• There is reason to believe the gold market is in for another great year. Actually, according to the World Gold Council, there may be six reasons.
The six trends the WGC highlighted include: heightened political and geopolitical risks, currency depreciation, rising inflation expectations, inflated stock market valuations, long-term Asian growth and opening of new markets.
However, the three standout factors, according to three economists quoted in the report, will be Asian growth, political uncertainty from Europe as well as rising inflation as a result of U.S. policy.
Reference: Mining, Kitco, Scrapregister
Thai
Eng