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Gold heads for first weekly gain in four as ETF holdings expand

Friday, October 21, 2016 - 12:30

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Gold headed for its first weekly gain in four as investors continue to boost holdings in exchange-traded funds backed by the metal.

[SINGAPORE] Gold headed for its first weekly gain in four as investors continue to boost holdings in exchange-traded funds backed by the metal.

Bullion for immediate delivery traded at US$1,264.61 an ounce at 9:29am in Singapore, from US$1,265.76 on Thursday, according to Bloomberg generic pricing. The metal is up 1.1 per cent this week.

Gold has rallied 19 per cent this year, partly due to the Federal Reserve's caution over raising interest rates, which makes non-interest yielding bullion more attractive.

While Fed funds futures show the probability of a rate hike in December climbing to 68 per cent from 66 per cent a week ago, gold-backed ETFs continue to expand.

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The assets rose for a seventh day, the longest stretch since Aug. 5, to 2,059.6 metric tons as of Thursday, according to data compiled by Bloomberg. That's the highest level since June 2013.

On Thursday, the European Central Bank left its stimulus strategy unchanged, pledging a three-month study of how it can ensure bond purchases amid increasing scarcity.

BLOOMBERG

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