Azernews.Az

By Bloomberg

Gold rose for the first time in 11 days, ending the longest losing streak in almost two decades, as the dollar weakened and investors speculated that recent losses have been overdone.

The decline in bullion increased physical demand from China and India, according to a research report from James Steel, an analyst at HSBC Securities (USA) Inc. The Bloomberg Dollar Spot Index slid as much as 0.5 percent.

Speculators have amassed record short holdings in the metal, meaning they’re wagering that the price may further decline. To some analysts, such as David Wilson of Citigroup Inc., that’s a sign that prices will eventually rise when bearish investors buy the metal to exit their positions.

“All the metals are looking very oversold,” Wilson said by phone from London on Thursday. “The market has been so short that any adverse move of the dollar will cause a bit of a squeeze.”

Gold has fallen almost every day this month, bringing losses to 7 percent for 2015, as the Federal Reserve moves closer to raising interest rates and the dollar strengthens. Higher rates diminish the appeal of gold, which typically offers returns only through price gains.

Futures for delivery in August rose 0.8 percent to $1,100.40 an ounce as of 6:20 a.m. on the Comex in New York. Bullion for immediate delivery advanced 0.8 percent to $1,102.68, Bloomberg generic pricing showed.

Trading volume was 34 percent above the 100-day average for the time of day.

Gold Funds

It’s been a painful two years for gold bulls, who by the end of 2012 had accumulated a record position after piling into gold exchange-traded funds and similar investments backed by the metal. Since then, more than $84 billion has been erased from the funds’ value, and their assets have dropped to the lowest level since March 2009.

Holdings in ETPs backed by gold fell 4.8 metric tons to 1,560.7 tons on Wednesday, dropping for a fifth day, data compiled by Bloomberg showed.

Silver for immediate delivery rose 0.7 percent to $14.906 an ounce. Platinum climbed 1.3 percent to $992 an ounce, increasing for a third day. Palladium added 1 percent to $634.25 an ounce.