Gold Set for Best Month in Two Years as Angst Fuels Haven Demand
(Bloomberg) -- Gold is soaring, set for the biggest monthly gain in almost two years after the partial U.S. government shutdown and concerns about the 2019 economic outlook stoked demand for the metal as a haven.
Gold futures touched a six-month high as U.S. stocks remain volatile and the shutdown in Washington enters its fifth day amid no signs of progress to resolve the dispute over funding for a wall on the southern border. That's helped to push money managers to their most bullish position on gold in half a year, while holdings in exchange-traded funds backed by bullion rise.
“New money is coming into the gold market as a result of the shutdown, propelling the move higher ,” Phil Streible, a senior market strategist at RJO Futures, said by phone from Chicago. “The path of least resistance is up.”
Gold futures for February delivery rose 0.1 percent to settle at $1,273 an ounce at 1:30 p.m. on the Comex in New York. The metal is up more than 3.8 percent in December, on course for the biggest monthly advance since January 2017.
ETFs Surge
Holdings in gold-backed ETFs have ballooned as equities have slid and investors price in expectations for fewer U.S. interest-rate increases in 2019. Assets rose 13 straight sessions through Dec. 25, to 2,187.2 tons.
Nine of 15 U.S. federal departments and dozens of other agencies shut down on Saturday after President Donald Trump refused to sign a spending bill that didn't include money for a border wall.
The metal's rally “should be a stark reminder to investors that gold in any form should be an essential part of any long-term investment strategy, as again the yellow metal has proven its weight when markets turn turbulent,” said Stephen Innes, head of Asia Pacific trading at Oanda Corp.
In other metals:
- Silver futures rise on Comex
- Metal touched highest since August
- Platinum and palladium climbed on Nymex
--With assistance from Jake Lloyd-Smith and Krystal Chia.
To contact the reporter on this story: Susanne Barton in New York at swalker33@bloomberg.net
To contact the editors responsible for this story: Joe Richter at jrichter1@bloomberg.net, Patrick McKiernan
©2018 Bloomberg L.P.
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