More gains to come by April for gold: Investors

NEW YORK: Gold just reached its highest price in seven months, and investors are betting there are more gains to come by April. Eight of the 10 most-traded gold options in New York on Monday were bets on further price gains as the metal topped $1,200 an ounce for the first time since June.

More than $2.6 billion was poured into exchangetraded funds tracking precious metals this year, and bullion assets held through ETFs are at the highest since July.

Investors are returning to gold after shunning the metal for three straight years. A stagnating global economy is threatening US expansion and casting doubts over whether Federal Reserve policy makers will raise interest rates anytime soon. That’s sending the dollar lower and raising the allure of gold as both a store of value and a haven asset.

A Bloomberg Intelligence index tracking bullion producers has jumped 20% this year. “Traders feel like there’s more weakness ahead for this economy, and gold is the place to be positioned,” Fain Shaffer, the president of Infinity Trading in Indianapolis, said. The gains for bullish options show “we may be seeing a change in this market,” he said.

Jumpa call giving owners the right to buy April futures at $1,200 was the most-traded option, with more than 9,500 lots changing hands. The price of the contract more than doubled.