Goldman Sachs said demand for gold call options had risen sharply as investors returned to assets used to hedge global macroeconomic policy risks. The bank said the options activity could amplify price movements in both directions.
Reduced conviction that the US Federal Reserve will raise interest rates again after pausing in July, combined with softer economic data, has also revived speculative demand for COMEX gold futures and interest-rate-sensitive gold exchange-traded funds.
Persistently high demand for call options could add further momentum to market movements, Goldman Sachs said.
Higher prices curb physical demand in India
The latest price surge discouraged retail gold buyers in India, while physical demand in China, the world’s largest gold-consuming market, remained steady.
Poland’s central bank slowed its gold purchases to 7.8 metric tonnes in July, according to data released on Friday.
Other precious metals also advanced:
Spot silver gained 2.3% to US$69.62 an ounce.
Platinum climbed 2.8% to US$1,878.58 an ounce.
Palladium rose 0.8% to US$1,344.96 an ounce.
Gold, silver, platinum and palladium were all heading for weekly gains.
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