Gold advanced to the highest level in more than six months, extending the longest weekly rally since August 2011, after a referendum in Crimea to leave Ukraine and join Russia boosted demand for a store of value.
Bullion for immediate delivery rose as much as 0.7 percent to $1,392.22 an ounce, the highest level since Sept. 9, and was at $1,386.87 at 7:49 a.m. in Singapore, up for a fifth day. The metal capped a sixth weekly increase last week, as holdings in exchange-traded products expanded to the highest this year.
Gold advanced 15 percent this year as turmoil in Ukraine and slowing growth in China, the largest consumer, increased demand for a protection of wealth. Assets in bullion-backed ETPs increased for a third week to 1,766.4 metric tons, the most since Dec. 27, data compiled by Bloomberg show, after a record contraction last year. The metal rebounded from the biggest annual decline since 1981 even as the U.S. Federal Reserve, which next meets March 18-19, reduced asset purchases.
“Geopolitical tension has propelled gold higher, with CFTC and ETF positioning showing that investors have turned more positive on gold,” Sun Yonggang, a macroeconomic strategist at Everbright Futures Co., said fromShanghai. “Gold’s advance this week may be limited by the Fed, which is expected to continue to cut bond buying.”
Gold for April delivery added as much as 1 percent to $1,392.60 an ounce on the Comex in New York, the highest intraday level for a most-active contract since Sept. 9. The net-long position in gold rose 4 percent to 123,007 futures and options in the week ended March 11, the most since December 2012, U.S. Commodity Futures Trading Commission data show. Short holdings fell 20 percent to 21,073, the lowest since October.