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Wednesday, April 20, 2016 1:15:47 PM
Gold spiked on weakness in oil
Following the collapse of the Doha talks, crude oil prices were in the red in today’s session. To start with, the West Texas Intermediate was down to a session low of $37.61 per share – it was down 2.9% to $39.20 per barrel towards the end of the session. Brent Crude was also in the red and it was down 2.4% at a time in European trade.
As expected, gold prices was up because of the weakness in oil prices. In fact, gold for June delivery was up 0.1% to $1,235.50 an ounce on COMEX – the yellow metal was as high as $1,243.30 at a point during the session. Frank McGhee, head precious metals dealer at Alliance Financial notes that “You had a little bit of safe-haven buying…after the OPEC meeting kind of fell apart… That seems to have worked its way through.”
The long case for gold is evident in inflow into ETFs
Gold is on to a rally in 2016 and the yellow metal doesn’t seem to be slowing down. Gold is already up more than 17% this year and that Direxion Shares Exchange Traded Fund Trust (NYSEARCA:NUGT) has more than doubled its trading price. Going forward, hedge funds are wagering that the rally in the yellow metal is still strong as the bullion kicks off the best yearly start since 1975.
Bloomberg reports that investors have poured $13.6B into ETFs tracking precious metals – inflows into gold accounted for more than 80% of inflows into ETFs in 2016. In addition, Commodity Futures Trading Commission reports that net-long positions in gold futures and options has been increasing in the recent past – net long positions spiked by 13% to 184,218 contracts in the week that ending April 12.
The U.S. Federal Reserve officials are cautious about raising interest rates and a low-interest rate environment tends to boost the prospects of gold. Karyn Cavanaugh, a senior market strategist at Voya Investment Management who manages a $210 billion fund says “We will see one or two rate rises this year, because the U.S. economy is doing pretty well… “But for now the lack of global growth is concerning people. People are asking where to put their money, and maybe gold is some place safe.”
http://learnbonds.com/128232/gold-direxion-shares-exchange-traded-fund-trust-rally/
Following the collapse of the Doha talks, crude oil prices were in the red in today’s session. To start with, the West Texas Intermediate was down to a session low of $37.61 per share – it was down 2.9% to $39.20 per barrel towards the end of the session. Brent Crude was also in the red and it was down 2.4% at a time in European trade.
As expected, gold prices was up because of the weakness in oil prices. In fact, gold for June delivery was up 0.1% to $1,235.50 an ounce on COMEX – the yellow metal was as high as $1,243.30 at a point during the session. Frank McGhee, head precious metals dealer at Alliance Financial notes that “You had a little bit of safe-haven buying…after the OPEC meeting kind of fell apart… That seems to have worked its way through.”
The long case for gold is evident in inflow into ETFs
Gold is on to a rally in 2016 and the yellow metal doesn’t seem to be slowing down. Gold is already up more than 17% this year and that Direxion Shares Exchange Traded Fund Trust (NYSEARCA:NUGT) has more than doubled its trading price. Going forward, hedge funds are wagering that the rally in the yellow metal is still strong as the bullion kicks off the best yearly start since 1975.
Bloomberg reports that investors have poured $13.6B into ETFs tracking precious metals – inflows into gold accounted for more than 80% of inflows into ETFs in 2016. In addition, Commodity Futures Trading Commission reports that net-long positions in gold futures and options has been increasing in the recent past – net long positions spiked by 13% to 184,218 contracts in the week that ending April 12.
The U.S. Federal Reserve officials are cautious about raising interest rates and a low-interest rate environment tends to boost the prospects of gold. Karyn Cavanaugh, a senior market strategist at Voya Investment Management who manages a $210 billion fund says “We will see one or two rate rises this year, because the U.S. economy is doing pretty well… “But for now the lack of global growth is concerning people. People are asking where to put their money, and maybe gold is some place safe.”
http://learnbonds.com/128232/gold-direxion-shares-exchange-traded-fund-trust-rally/
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