Gold Investors Bet on Resilient Rally as Open Interest Surges

by Luzi-Ann Javier

Add a jump in open interest to signs that gold’s rally may persist after the best start to a year in a decade.

Open interest, a tally of outstanding contracts in Comex futures, rose 3.1 percent to 565,774 on Tuesday, the highest since January 2011. The same day, investors boosted holdings in exchange-traded funds backed by the metal for a sixth straight session to the highest since December 2013. The increases come after hedge funds boosted net-long positions in bullion futures and options more than five-fold since early February.

[…] Gold futures climbed 20 percent this year in the best start since 2006, helped by speculation that the U.S. Federal Reserve will be slow to tighten monetary policy amid global risks to growth and as lending rates in the euro area and Japan fell below zero. Low borrowing costs are a boon to gold and other precious metals because they don’t offer yields or dividends.

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