Gold exceeded $1,300 an ounce for the first time since August on speculation slowing global growth will prompt central banks to boost stimulus, spurring haven demand.
Investors are adding to gold-backed funds at the fastest pace in three years. Open interest in New York futures and options is at the highest in eight weeks, and money managers are the most bullish since August. Silver also climbed on Wednesday in London in its best start to a year in three decades.
After shunning gold for two years, investors are returning to the metal amid concern U.S. growth won’t be enough to offset weakness in foreign economies. Policy makers in Europe and Asia are being challenged to come up with new ways to spur growth amid prolonged below-target inflation. Bullion rose 70 percent from December 2008 to June 2011 as the Federal Reserve pumped more than $2 trillion into the financial system.
“Capital is flowing into safe assets such as gold,” said Mark To, head of research at Wing Fung Financial Group, a trader and refiner in Hong Kong. “The market is currently full of news that’s supportive of higher gold prices — expectations for lower global growth, uncertainty around what the ECB will do and more stimulus around the world.”
Bullion for immediate delivery climbed as much as 0.6 percent to $1,303.63 an ounce and traded at $1,299.83 by 12:29 p.m. in London, according to Bloomberg generic pricing. Futures for February delivery on the Comex in New York gained 0.4 percent to $1,299.70.
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