Rekindled interest in precious metals has lifted holdings of physically backed exchange-traded gold and silver funds to the highest in about a year.
SPDR Gold Trust, the world's largest gold ETF, said its holdings had hit 1,308.41 tonnes, the loftiest since last August.
Holdings in iShares Silver Trust, the world's biggest silver ETF, climbed to a 11-month high of 9,940.66 tonnes by Sept 20. The Relative Strength Index on spot gold stood at 76. A reading above 70 suggests the underlying asset is overbought, and the RSI on gold has been above 70 since at the end of August.
But gold will remain attractive to investors seeking to hedge against future inflation, or looking for alternative investment in a low interest rate environment, traders said. "We are not overbought, and there is still room for more money to enter the gold market," said Yuichi Ikemizu, branch manager for Standard Bank in Tokyo, adding that the net long positions in U.S. gold futures and options were way below a peak last year before gold struck a historical high above $1,920.
The net length in U.S. gold stood at 165,724 contracts by Sept. 11, more than doubled from the level in mid-August but 35 percent lower than the peak of 253,653 contracts last August.
The U.S. Commodity Futures Trading Commission is due to release this week's trader commitment data later in the day. Spot platinum rose 0.9 percent to $1,634.74, but was headed for a weekly loss of 4 percent -- its biggest one-week decline in four months. The labour disputes in top platinum producer South Africa's mining sector, however, are expected to lend support to prices.
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1770.76 3.57 +0.20 13.23
Spot Silver 34.72 0.13 +0.38 25.39
Spot Platinum 1634.74 13.74 +0.85 17.35
Spot Palladium 665.25 5.15 +0.78 1.95
COMEX GOLD DEC2 1773.50 3.30 +0.19 13.19 15446 COMEX SILVER DEC2 34.78 0.10 +0.28 24.59 5966 Euro/Dollar 1.2990 Dollar/Yen 78.14 COMEX gold and silver contracts show the most active mont