Gold futures rose for the first time in three days as signs that money supplies will increase in Europe and Asia revived investor demand.
Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by the metal, climbed 0.5% last week, the most since August. Money managers raised their bullish wagers for a third straight week, the longest expansion since July, government data showed Dec. 5.
While European Central Bank policy makers refrained from increasing asset purchases at a meeting last week, President Mario Draghi pledged to assess the need for more stimulus early next year. China last month lowered interest rates to spur economic growth, while Japan has expanded its unprecedented stimulus program.
“Even though Draghi didn’t do anything in December, he’s determined to do something in the first quarter of 2015,” Tai Wong, the director of commodity products trading at BMO Capital Markets Corp. in New York, said in a telephone interview. “People are looking at easing in China and Europe, and the only place that’s looking at tightening is the U.S., and no one is really sure when they’ll get there.”
Gold futures for February delivery climbed 0.4% to $1,194.70 an ounce at 10:05 a.m. on the Comex in New York. Prices climbed 1.3% last week, the third gain in four weeks.
Trading was 40% below the 100-day average for this time of day, data compiled by Bloomberg show.
Speculators increased their net-long position rose by 20% to 79,497 futures and options in the week ended Dec. 2, the highest since Aug. 26, according to U.S. Commodity Futures Trading Commission data. Holdings more than doubled in three weeks.
Prices dropped to a four-year low of $1,130.40 on Nov. 7 amid speculation that gains for the U.S. economy will prompt the Federal Reserve to raise interest rates, cutting the appeal of inflation hedges.
Employers in the U.S. added 321,000 jobs last month, the most since January 2012, the government said Dec. 5. Futures fell as much as 1.8% after the report, before paring losses to settle 1.4% lower. Some investors have closed bearish bets as prices fell less than expected on the jobs data, Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said by telephone.
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