Gold prices up near three-month highs

Gold prices rose yesterday towards the three-month highs hit earlier this week as nervous investors retreated from stock markets and piled into the precious metal seen as a refuge from financial turmoil. Spot gold was up 0.3 per cent at $1,235.53 an ounce at 1134 GMT having earlier this week hit $1,239.68, its highest since the middle of July. It is on course for a fourth week of gains. U.S. gold futures rose 0.5pc to $1,238 an ounce.

Global stocks slid again yesterday and were set to post their worst weekly losing streak in more than five years. “The confusion in bond and stock markets is fuelling some interest in gold. If they continue to fall, that will give support to gold. You’ll then have trend buyers coming in and supporting the price,” said Alasdair Macleod, head of research at GoldMoney.com.

“The bears are frightened of being caught on the wrong side. The liquidation of short positions on COMEX has the potential in the short term to drive gold up to between $1,260 and $1,270.” Gold prices have gained more than 6pc after falling to $1,159.96 an ounce in mid-August, their lowest since Jan. 2017.

Investor flows into bullion, often considered a safe haven and store of value during times of financial, economic and geopolitical uncertainties, can be seen by the rise in holdings of physically-backed exchange traded products. Holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust saw outflows of about 4.5 million ounces between late April and early October. But now at 24.1 million ounces, holdings are at their highest since the end of August.