Reply #29: Gold Rebounds as Higher Energy Costs Spur Inflation Concern [View All]

[54anickel]

http://www.bloomberg.com/apps/news?pid=20601012&sid=apQTzWpmGljs&refer=commodities

Feb. 5 (Bloomberg) -- Gold prices rose in New York on speculation higher energy costs will boost the appeal of the precious metal as an inflation hedge.

Gold sometimes moves in the same direction as the price of oil, which has almost tripled in the past five years. Gold reached a 26-year high of $732 an ounce in May, and oil climbed to a record in July. Oil has jumped more than $5 a barrel in a week.

``Gold has some spillover strength from crude oil,'' said Tom Hartmann, a commodity broker at Altavest Worldwide Trading Inc. in Mission Viejo, California.

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Hedge-fund managers and other large speculators increased net-long positions in Comex futures by 19 percent in the week ended Jan. 30, according to U.S. Commodity Futures Trading Commission data. Speculative long positions, or bets prices will rise, outnumbered short positions by 100,345 contracts, the data showed.

``With such a sizable speculative position, there's room for liquidation,'' Platt said. ``There's more room to go on the downside.''

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