Daily Gold Update

Source: Bloomberg

New York— Hedge funds are piling back into New York gold futures and options as turmoil in Egypt sent bullish bets on the metal to the highest since April 2010, government data show. Holdings in silver also increased. Managed-money funds held net-long positions, or wagers on rising prices, totaling 145,846 contracts on the Comex as of Feb. 2, U.S. Commodity Futures Trading Commission data showed on Feb. 11. The holdings jumped 17 percent, after five straight weeks of declines. Gold rallied 0.8 last week, the biggest price gain since December, as protests in Egypt forced President Hosni Mubarak to flee the country after 30 years in power. In January, the metal dropped 6.1 percent as an improving world economy eroded gold�s appeal as a haven investment. Prices have rallied for 10 straight years, touching a record $1,432.50 an ounce on Dec. 7.

�You�re seeing a renewed interest in gold from speculative money who put the brakes on the metal earlier this year,� said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago. �There�s turmoil in Egypt, and inflation is heating up. Investment advisers and money managers are ready to put their money back to work. People are more comfortable jumping back into gold after a correction.� Gold futures for April delivery settled on Feb. 11 at $1,360.40, after rallying to a three-week high of $1,369.70 during the session. See full story.