The positive U.S. GDP report announced last week has meant improved risk sentiment & the recent pullback in Gold Prices has attracted physical demand and investor buying. With this GDP report, it’s been 13 months that the economy has actually expanded. Gold market traders are again getting to be the most bullish in three weeks as investors’ bullion holdings rose to a record on Friday 26 – 2012. Investors boosted holdings in exchange-traded products to an all-time high of 2,585.1 metric tons, valued at $142.4 billion, data compiled by Bloomberg show. Hedge funds’ bets on a rally are near the biggest in more than a year, according to U.S. CFTC – Commodity Futures Trading Commission data. Central banks from Europe to China to the U.S. have pledged to do more to boost economies. The yen reached a four-month low versus the US Dollar this week on speculation the Bank of Japan (8301) will further expand stimulus and the Federal Reserve said it plans to continue buying bonds. A QE4 can be expected from the US Federal Reserve or an expansion to the QE3 when Operation Twist finishes in two months by December end. The BOJ, which holds a policy meeting Oct. 30, will consider raising its asset-purchase program by 10 trillion yen ($125 billion) to 90 trillion yen, the Nikkei newspaper reported. Inflation expectations measured by the break-even rate for five-year Treasury Inflation Protected Securities jumped 33% this year and reached a 16-month high in September. Gold ETP holdings gained 7.9% since the end of July and now account for almost a year of mine production.
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