February 29, 2016
Gold Rises Above $1,220, Set For Best Month in Four Years
(Reuters) - Gold edged up on Monday and looked set to log its best monthly performance in four years, bolstered as turmoil in stock markets drove safe-haven demand.
Bullion has rallied about 15 percent this year as investors have sought safety in the metal as concerns over the global economy hit share markets. The rally has also been spurred by expectations the Federal Reserve will not raise U.S. rates this year.
Spot gold had gained 0.2 percent to $1,224.70 an by 0311 GMT, after dropping 1 percent on Friday on strong
U.S. economic data.
Despite Friday's losses, gold has gained 9.6 percent in February, its biggest monthly jump since January 2012. U.S. gold, with a 9.8-percent gain, was also headed for its best month in four years.
"Gold still shines as a safe-haven in the current equity rout," OCBC Bank said in a note, adding that higher hurdles for the Fed to hike rates three times this year as per the bank's December expectations would also support prices above $1,200.
"Early Chinese buying at a modest on-shore premium has seen gold trade as high as $1,226 today," said MKS Group trader Sam Laughlin.
Gold prices on the Shanghai Gold Exchange were at a premium of about $2 an ounce, indicating buying interest from the top consumer China.
Money flows into gold continued to indicate bullishness on prices.
Hedge funds and money managers raised their bullish stance in COMEX gold to a one-year high in the week to Feb. 23, U.S. Commodity Futures Trading Commission data showed on Friday.
SPDR Gold Trust, the world's top gold-backed exchange-traded fund, said its holdings rose 0.27 percent to 762.41 tonnes on Friday, the highest in about a year.
Gold funds accumulated their largest inflows since 2009 in the week to Feb. 24 as financial market turmoil continued to unnerve investors, Bank of America Merrill Lynch said on Friday.
Physical demand in Asia, however, remained subdued last week as buyers were sceptical about the sustainability of the recent price rally, with the Indian market falling to record discounts as consumers postponed purchases in expectation of a cut in the import tax.