Gold Gains to Three-Week High as U.S. Slowdown Fans Haven Demand

Gold futures reached a three-week high as weaker-than-expected U.S. factory orders and slower growth in service industries boosted demand for the metal as a haven.

Growth in U.S. service industries slowed for a fourth straight month in February, prompting the first job cuts in two years, according to a report by the Institute for Supply Management Thursday. The group’s employment measure dipped below the expansion threshold for the first time since February 2014. Applications for jobless claims unexpectedly climbed last week, a Labor Department report showed Thursday.

Gold rallied 19 percent this year, beating gauges in Treasuries, currencies and Equities Equities Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Read this Term amid concerns the slowdown in global growth will hurt the U.S. economy. That’s also fueling bets the Federal Reserve may delay interest rate increases this year, helping boost the investment appeal for bullion, which doesn’t pay yields or dividends.

“The big rally this year is drawing more interest from across the spectrum of investors, including some who haven’t been involved in the space for some time,” said Tai Wong, the director of commodity products trading at BMO Capital Markets Corp. in New York.

Gold futures for April delivery jumped 1.3 percent to settle at $1,258.20 an ounce at 1:43 p.m. on the Comex in New York. Prices reached $1,261.30, the highest since Feb. 11.

Through Jan. 5, hedge funds and other large speculators had been net-short on gold for eight straight weeks. The trend reversed on Jan. 12, and as of last week, their net-wagers on price gains reached the highest in a year, according to U.S. government data.

The bullish sentiment is also being reflected in Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term-traded funds. Investors boosted holdings in gold-backed ETFs by 251.9 metric tons this quarter, poised for the biggest such gain since the three months ended June 2010. Holdings have been increasing after three straight years of withdrawals.

• Silver, palladium and platinum also climbed
• A Bloomberg Intelligence gauge of gold producers rose 2.9 percent, led by Yamana Gold Inc. and Kinross Gold Corp., which gained 6.9 percent and 6.7 percent, respectively

To contact the reporters on this story: Joe Richter in New York at jrichter1@bloomberg.net, Luzi Ann Javier in New York at ljavier@bloomberg.net. To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Millie Munshi

By: Joe Richter and Luzi Ann Javier

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