Commodities: Gold may rush higher as buyers switch from bonds
Gold may top $600 an ounce this week for the first time in 25 years as investors buy bullion instead of U.S. bonds, according to a Bloomberg News survey.
"It's going to $600," said Duncan Cruickshank, an analyst at Commodity Warrants Australia. "People are piling in. People will make money even if they buy at these levels."
Nineteen of 30 traders, investors and analysts surveyed worldwide late last week advised buying gold, which rose $21.20 to $586.70 an ounce last week in New York. Seven advised selling and four were neutral.
Gold has rallied 13 percent since the end of December, outperforming the 3.7 percent gain in the Standard & Poor's 500-stock index. Holders of the benchmark 10-year U.S. Treasury note lost 2.8 percent. Gold held for exchange-traded funds linked to the price of the metal grew about 28 percent in the first quarter, reaching 14 million ounces, the producer-financed World Gold Council, based in London said.
Demand by investment funds has fueled the rally in gold this year.
"The key buyers are funds," said Paul McLeod, vice president for precious metals at Commerzbank Securities in New York.
Hedge-fund managers and other large speculators increased their holdings positions in New York gold futures in the week ended March 28, government figures show.
"No one wants to be short in this environment," Adrian Day of Adrian Day's Asset Management said, referring to bets on falling prices. "People are looking for opportunities to buy, not to sell."
Gold may rise as central banks sell dollars and buy gold. About 75 percent of China's reserves are held in dollars. The country may buy gold to protect itself from a falling dollar, analysts said.
"Gold and the euro are most likely the top candidates to benefit from the Chinese, United Arab Emirates and other central banks selling the U.S. dollar," said Emanuel Balarie, a senior market strategist at Wisdom Financial.
China has 1.3 percent of its reserves in gold, or 600 tons, the World Gold Council estimates.
SEATTLE Gold may top $600 an ounce this week for the first time in 25 years as investors buy bullion instead of U.S. bonds, according to a Bloomberg News survey.
"It's going to $600," said Duncan Cruickshank, an analyst at Commodity Warrants Australia. "People are piling in. People will make money even if they buy at these levels."
Nineteen of 30 traders, investors and analysts surveyed worldwide late last week advised buying gold, which rose $21.20 to $586.70 an ounce last week in New York. Seven advised selling and four were neutral.
Gold has rallied 13 percent since the end of December, outperforming the 3.7 percent gain in the Standard & Poor's 500-stock index. Holders of the benchmark 10-year U.S. Treasury note lost 2.8 percent. Gold held for exchange-traded funds linked to the price of the metal grew about 28 percent in the first quarter, reaching 14 million ounces, the producer-financed World Gold Council, based in London said.
Demand by investment funds has fueled the rally in gold this year.
"The key buyers are funds," said Paul McLeod, vice president for precious metals at Commerzbank Securities in New York.
Hedge-fund managers and other large speculators increased their holdings positions in New York gold futures in the week ended March 28, government figures show.
"No one wants to be short in this environment," Adrian Day of Adrian Day's Asset Management said, referring to bets on falling prices. "People are looking for opportunities to buy, not to sell."
Gold may rise as central banks sell dollars and buy gold. About 75 percent of China's reserves are held in dollars. The country may buy gold to protect itself from a falling dollar, analysts said.
"Gold and the euro are most likely the top candidates to benefit from the Chinese, United Arab Emirates and other central banks selling the U.S. dollar," said Emanuel Balarie, a senior market strategist at Wisdom Financial.
China has 1.3 percent of its reserves in gold, or 600 tons, the World Gold Council estimates.