Gold Traders Bullish with Record Holdings

Gold traders are the most bullish in three weeks as investors’ bullion holdings expanded to a record after central banks pledged to do more to spur economic growth.

Twenty of 32 analysts surveyed by Bloomberg expect prices to rise next week, nine were bearish and three were neutral. Investors are holding the most metal ever through gold-backed exchange-traded products after buying 85.4 metric tons last month, the most since July 2011. Hedge funds’ bets on a rally are the biggest in seven months, U.S. Commodity Futures Trading Commission data show.

The European Central Bank held interest rates at a record low yesterday after agreeing on an unlimited bond-purchase program last month and the Federal Reserve announced a third round of quantitative easing. The Bank of Japan has said it will add to a fund that buys assets and China approved a $158 billion subways-to-roads construction plan. Gold rose 70 percent as the Fed bought $2.3 trillion of debt in two rounds of quantitative easing from December 2008 through June 2011.

“More and more people are going to anticipate inflation in the future because of quantitative easing and the amount of debt we’ve got in the system,” said Frederique Dubrion, the Geneva- based president and chief investment officer of Blue Star Advisors SA, which manages metals and energy assets. “We can print whatever amount of money we need, but you can’t print gold. It’s nobody’s liability, it’s a hard currency.”

via Bloomberg

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell