Hedge funds are snapping up gold, pushing their net long positions to levels not seen for almost two years, CNBC reported. Meanwhile, analysts are split over what 2015 will hold for the precious metal.
Speculative investors bought gold for a fourth successive week at a “strong pace” upping long positions. Silver has also been bought for close to 12 weeks, but positioning remains “far from stretched,” according to data from Bank of America Merrill Lynch.
The bank said its indicators suggest investors remain bullish for precious metals, a view which is supported by a number of investment banks and economists, but targets for where the metal will end up by year end differ dramatically.
Gold prices jumped more than 1% last week, topping $1,300 per ounce for the first time since the third quarter last year, as the euro tumbled to an 11-year low after the European Central Bank’s new stimulus plans were revealed.
Commodity analysts at Citi said this “elevated” gold trading ties into its raised forecast for 2015 bullion prices to the mid- $1,200s level – up from its $1,220 estimate in the fourth quarter of 2014. But the bank said the metal may well struggle to “firmly break-out too far above” $1,300.
US silver had the largest decline on Tuesday, January 27, dropping 2.1% and landing at $17.91 per ounce. The price of Chinese silver closed at CNY 3,750 ($599.51) per kilogram. Following a couple days of improvement, prices fell by 1.8%. At INR 40,000 ($650.85) per kilogram, Indian silver fell 1.8% on Tuesday. Following two days of rising prices, the price of Japanese silver dropped 0.4% to JPY 686.00 ($5.79) per 10 grams.
Weakening prices followed two days of improvement as the price of Chinese gold bullion dropped 1.1% to CNY 257.50 ($41.17) per gram. US gold bullion prices saw a 1.0% decline to $1,281 per ounce. Japanese gold bullion ended the day at JPY 4,883 ($41.19) per gram, after the 0.7% drop yesterday. The price of Indian gold bullion declined 0.5% to INR 28,018 ($455.89) per 10 grams.
At JPY 4,750 ($40.07) per gram, Japanese platinum bar fell 1.6% on Tuesday. US platinum bar closed 1.3% lower at $1,247 per ounce. The price of Chinese platinum bar fell 1.1% to CNY 268.00 ($42.84) per gram.
Japanese palladium bar finished the day down 1.4% to JPY 2,884 ($24.33) per gram. US palladium bar saw its price rise 0.5% to $777.00 per ounce. The price of Chinese palladium bar showed little movement yesterday at CNY 174.00 ($27.82) per gram.