Updated on
Summary Price of gold may surge in local and global markets as Obama wins second term, say market experts.
Gold traders are the most bullish in 11 weeks and investors accumulated record bullion holdings on speculation US policy makers will add to stimulus following President Barack Obama’s re-election.Twenty-five of 33 analysts surveyed by Bloomberg expect prices to rise next week and three were bearish. A further five were neutral, making the proportion of bulls the highest since August 24. Investors boosted assets in gold-backed exchange-traded products to an all-time high of 2,596 metric tons yesterday, valued at $144.9 billion, data compiled by Bloomberg show.Gold rose 11 percent to $1,736.11 an ounce in London this year, heading for a 12th straight annual gain, the longest winning streak in at least nine decades.Bullion is heading for the first weekly gain in five as Obama was re-elected with the highest unemployment rate of any president returned to office since Franklin Roosevelt in 1936. The Fed said Oct. 24 it will maintain $40 billion in monthly purchases of mortgage debt and probably hold interest rates near zero until mid-2015.Some investors buy bullion as a hedge against inflation and a weaker dollar, and the metal generally earns returns only through price gains, increasing its allure as interest rates decline.
