Gold capped the longest rally since August 2012 as Federal Reserve Chairman Janet Yellen said more work is needed to restore the labor market, signaling monetary policy will boost demand for alternative assets.
Hedge funds raised bullish gold wagers by the most since July and sold copper holdings as emerging-market turmoil boosted concern the global economy will slow and increased demand for precious metals as a haven.
The world’s biggest economies will need to refinance $7.43 trillion of sovereign debt in 2014 as bond yields begin to climb from record lows, threatening to raise borrowing costs while nations struggle to bring down elevated budget deficits.
Standard Life Investments said it isn’t tempted to buy Greek, Portuguese and Irish securities as they get cheaper and yields surge, given it remains skeptical about the fiscal outlook for Europe’s most indebted nations .
Supply gluts in metals including copper and nickel may be limited as mining companies trim investments in production expansion after prices declined this year, according to Standard Life Investments Ltd.
U.K. manufacturers, which have provided investors with the highest returns in London’s FTSE All-Share Index over the past 12 months, are set to extend gains in 2011 driven by rising demand from Asia and a weaker pound, analysts and strategists say.
When European Central Bank President Mario Draghi vowed July 26 to do “whatever it takes” to defend the euro, he succeeded in stemming a slide that pushed the 17- nation currency down about 6 percent since late March against its major counterparts.