London: Gold advanced for a second day as turmoil across oil markets increased demand for a safe haven.
Bullion for immediate delivery climbed as much as 0.5 per cent to $1,240.14 (Dh4,555) an ounce and traded at $1,239.05 at 11.07am in London, according to Bloomberg generic pricing. Oil tumbled the most in two months after output talks between the world’s biggest producers ended without any agreement on limiting supplies, a diplomatic failure that threatens to renew the rout in prices.
“There has been some deterioration in market sentiment because of lower oil prices, and that is supporting gold and the yen,” Georgette Boele, an Amsterdam-based currency and precious-metals analyst at ABN Amro Bank NV, said by email. “The market these days seems to follow oil, with gold trading the opposite way.”
Gold has climbed 17 per cent this year amid financial-market tumult and concerns over the outlook for global economic growth. Even after the best start to a year since at least 1975, investors are positioning for more gains.
Money managers increased wagers on a price rally to the highest since 2012, taking their optimism to a level last seen before a three-year bear market started. The net-long position in gold futures and options jumped 13 per cent to 184,218 contracts in the week ended April 12, according to Commodity Futures Trading Commission data released three days later.
Assets in exchange-traded funds backed by gold increased for the first time in three days on Friday, rising 5.3 metric tonnes to 1,765.3 tonnes, data compiled by Bloomberg show. Investors have increased holdings by 21 per cent this year.
