Central Banks Have Gold Bulls Running

Hedge funds added bullish gold wagers at the fastest pace since June as central bank action from China to Japan and Europe helped stem the rout in prices.

The net-long position in New York futures and options expanded 56 percent, U.S. government data show. Short holdings fell to a two-month low and long wagers climbed for the first time in four weeks.

Prices touched a three-week high Nov. 21 after China lowered its key interest rate for the first time since July 2012. The European Central Bank and Bank of Japan also added stimulus to shore up expansion. Gold dropped on Nov. 7 to the lowest level since 2010 as a strengthening U.S. economy and dollar fueled bets the Federal Reserve is moving closer to raising borrowing costs.

Bloomberg

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