Futures traded in New York may rise 12 percent to $1,950 an ounce by the end of the first quarter, according to the median of estimates by UK-based advisory firm, Greenbrier Diversified.
Holdings in exchange-traded products (ETP) backed by bullion rose the most in three months in October, and the most-widely held option gives owners the right to buy gold at $2,000 by Nov. 22. Demand for the metal accelerated since May as slowing growth and mounting concern that European leaders will fail to contain the region’s debt crisis caused $7.5 trillion to be erased from the value of global equities.
“There is a loss of trust in the entire financial system and urgent need for safe-haven investment,”
ETP holdings expanded 1 percent to 2,271.2 metric tons last month, a pile now valued at $126.6 billion and greater than the reserves of all but four central banks, data compiled by Bloomberg show. Bullion bought for investment accounted for 38 percent of total demand in 2010, compared with about 4 percent a decade earlier, the London-based World Gold Council estimates.
Gold has risen 22 percent this year, beating the 2.2 percent advance in the Standard & Poor’s GSCI gauge of 24 commodities, the 9.3 percent decline in the MSCI All-Country World Index of equities and the 8.8 percent return on Treasuries calculated by Bank of America Corp. indexes. The metal has appreciated more than sixfold in its 11-year run of annual gains.
Prices climbed 6.3 percent in October, rebounding from the bear market in September after dropping more than 20 percent from the record $1,923.70 reached Sept. 6. Bullion for December delivery traded at $1,787 today.
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