Weak dollar drives metal bulls to long rally

NEW YORK: A global slowdown has increased speculation that US growth will cool enough to force Federal Reserve policy makers to wait longer before raising interest rates again.

The prospect of delays sent the dollar lower and gave metals a boost as alternative investments. Speculators increased their bets on price gains for gold and silver and got less bearish on copper.

Gold and copper prices have climbed for three straight weeks, the longest rally since at least mid-April. The 80-member Bloomberg World Mining Index jumped 8.2% last week, adding more than $38 billion to the combined value of the companies. The metals are rebounding from a slump in 2015, when excess supplies and little investor interest spurred declines.

“The big driver for this move is a bit of a reversal in the macroeconomic picture,” said Maria Smirnova, a portfolio manager at Sprott Asset Management in Toronto, which oversees C$8.5 billion ($6.1billion). “All of a sudden, the Fed is acting dovish, growth seems to be slowing all around the world, interest rates are falling all around the world. It’s a risk-off trade right now where people are buying gold and other metals.” Money managers boosted their combined netlong holdings across gold, silver and copper.