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Strong Investment Demand Helps Gold Prices Surge for Third Straight Session

August 11, 2016 at 17:24 by Andrew Moran

Gold prices are on track for their third consecutive trading session of gains. After a new industry report found that there has been a strong investment demand for the yellow metal, gold prices continued their strong trading week.

December gold futures climbed 0.15%, or $2.00, to $1,346.51 an ounce on Thursday at 16:52 GMT. Gold has nearly pared all of its Friday and Monday losses, which stemmed from the stellar July US jobs numbers from the Department of Labor. Gold will have three straight sessions of gains.

Silver has remained relatively unchanged after crossing the $20 threshold. September silver futures dipped 0.21%, or $0.04, to $20.09 per ounce.

According to the World Gold Council (WGC), investors had a fierce appetite for precious metals amid volatility in the global financial markets and accommodative monetary policies from the likes of the Federal Reserve, the European Central Bank (ECB), the Bank of Japan (BOJ), and the Bank of England (BOE).

The report from the industry trade group found that investment demand for gold in the first half of 2016 reached 1,063.9 metric tons. The demand included bars, coins, and ETFs. This is up 16% from the previous first-half-of-the-year record in 2009 at the height of the economic collapse.

Alistair Hewitt, head of market intelligence at the WGC, said in a statement that the foundations for this huge demand for gold and silver are sound.

The global picture for gold is dominated by considerable and continued investment demand driven by the West as investors rebalance their investments in response to the ever-expanding pool of negative yielding government bonds and heightened political and economic uncertainty.

It has not been a secret that both central banks and investors have been high on gold, even if they do not want to admit it. For years, central banks have added to their gold holdings, while investors have turned to gold as a safe haven from sluggish global economic growth, negative-yielding bonds, and financial uncertainty.

The soaring demand for precious metals in the first six months of the year coincided with a 25% increase in gold prices and a 43% spike in silver prices.

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