As the U.S. Federal Reserve is all set to taper stimulus, gold futures rose on Monday. According to the latest data available, on the Comex division of the New York Mercantile Exchange, gold futures rose 0.82% to USD1,274.90 a troy ounce on Monday during Asian trade. Earlier, ForexMinute had reported that this year, gold prices may cross $1300 mark.
Now, it looks that it is very much possible the way things are going on in the commodity market. For instance, in the earlier session Comex gold prices traded between USD1,270.30 and USD1272.50 and finally settled at USD1264.50. Some estimates say that gold futures were likely to find support at USD1,230.80 a troy ounce.
ForexMinute has also reported that China is importing huge amounts of gold and for that it has in fact issued licenses for the first time to two foreign banks to allow more gold imports. For instance, whereas it issues licenses to Australia and New Zealand Banking, now it seems that China Everbright Bank has been granted approval,
China Planning To Diversify Its Holdings Away From U.S. Treasury Bonds to Gold
Thanks to heavy imports from China, last week, the February Comex gold contract added 1.67%, the fifth consecutive weekly increase. The increase in fact, is the longest run of weekly gains in 16 months so far. It is evident that investors are looking for safe investment options when something fearful comes in global market and new love for gold is an indication of the same.
Particularly, when market sentiment has been hit by concerns over a slowdown in China after data came the last week that showed that the preliminary reading of the HSBC manufacturing index fell to a six-month low in January, the love for yellow metal is not without a reason. Other beneficiary is Bitcoin that is appearing a better investment option for traders.
Gold is also seeing higher prices and it is evident from the data gathered by the Commodities Futures Trading Commission. The body released data that shows that hedge funds and money managers raised their bullish bets in gold futures in the week ending January 21 which is a positive indication for the precious metal.
Moreover, when the central bank of China is planning to diversify its holdings away from U.S. treasury bonds to gold, the gold prices are expected to go higher. Additionally, investors should take heed that the yellow metal is still a solid safe haven for wealth protection, particularly, when the IMF head has shown her concern on the global economic slowdown.
To contact the reporter of this story: Jonathan Millet at email@example.com