Gold traders remain upbeat

London. There’s one thing many gold traders and analysts agree on, now is a great time to own bullion.

Those surveyed by Bloomberg last week were the most bullish in a year. They cited worries over political developments in Europe, and in the US following Donald Trump’s election, as well as expectations of stronger demand ahead of the Lunar New Year.

After posting the biggest quarterly drop in more than two years, prices are now heading for their best weekly performance since April.

“The eurozone has plenty of crisis triggers over coming months; Indian and Chinese buying remain strong and Trump’s policy threatens inflation,” said Adrian Day, president of Adrian Day Asset Management in Annapolis, Maryland, which oversees $190-million. “All this is positive for gold.”

Gold benefited this week as the dollar retreated from the highest in more than a decade and investors sought a haven amid doubts that Trump will usher in an era of fiscal easing and rapid growth. Bullion plunged 13 per cent last quarter -- one of the worst performances among commodities -- on expectations that the Federal Reserve will raise borrowing costs faster than previously thought.

Fourteen gold analysts and traders surveyed by Bloomberg last week were positive on the outlook for prices, while two were bearish and one was neutral. Demand for gold as gifts in China normally rises before the Lunar New Year, which this year starts at the end of January.

The metal climbed 2.6 per cent last week to $1,177.71/oz in London, near a one-month high, according to Bloomberg generic pricing. The rebound has fed through to mining stocks, with the FTSE/JSE Africa Gold Mining Index rising for the sixth time in seven sessions to the highest since November. (AFP)