Johannesburg - Gold advanced and headed for its biggest monthly gain in four years as falling equities bolstered demand for a haven.
The metal rose for the fourth time in five days as global stocks retreated after investors were underwhelmed by vague commitments from finance chiefs to spur growth and a cut in China’s reserve requirement ratio. Bullion has jumped 10 percent this month and is this year’s best-performing major asset.
Investors have boosted holdings in gold-backed funds to a 17-month high as global market turmoil prompted the Federal Reserve to signal it will hold off raising borrowing costs, while other central banks adopted negative rates. Speculators are the most bullish on U.S. bullion futures in a year.
“With rates expected to be lower for longer in the US, negative rates in countries like Japan and a drop in global stock markets, you’re incentivized to put your money into gold,” Bernard Dahdah, a commodities analyst at Natixis SA in London, said by phone.
Bullion for immediate delivery gained 0.9 percent to $1,233.93 an ounce by 11:16 a.m. in London, according to Bloomberg generic pricing. It’s up 16 percent so far this year.
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Gold exchange-traded product holdings rose 3.9 metric tons to 1,682.6 tons as of Friday, the highest since October 2014, data compiled by Bloomberg show. Money managers boosted their net-long position in futures and options by 32 percent in the week ended February 23, US government data show.
In other metals, silver rose 0.9 percent to $14.8275 an ounce in London, set for the first back-to-back monthly gain in a year. Palladium climbed 2.9 percent to pare a monthly decline. Platinum gained 1 percent, extending February’s advance to 6 percent.
BLOOMBERG