Net long gold positions on US commodity exchange COMEX jumped 9% in the week to Tuesday, June 21, to 250,408 contracts, setting a new high since records began in 2006, Commodity Futures Trading Commission data showed Monday.
The bullish money-manager positions are up from 229,240 contracts reported last week, which exceeded the 2011 high of 228,000 contracts.
Investors and speculators have piled into gold this year on rising spot prices, now up around 25% since January 1, and recording sharp gains since Friday on Britain's shock referendum decision to quit the European Union.
Living up to its reputation as a safe-haven asset, gold climbed 8%, or $100, to a 2.5 year high of $1,359/oz in the early hours of Friday following the result of Thursday's referendum, but eased to around $1,320/mt by the end of the day.
Despite a firmer dollar, gold continued to climb Monday, up 0.75% on the day to $1,330/mt lunchtime.
Analysts are in agreement a period of heightened global financial market and economic uncertainty following the UK decision should benefit gold in the short and medium term, with lower interest rate expectations adding to safe haven demand.
"With yields already low and under further pressure globally, the opportunity cost of holding gold continues to diminish," ICBC Standard Bank analyst Tom Kendall said Monday.
Ten year US Treasuries have fallen to around 1.5% Monday, close to new record lows, while many analysts are expecting the Bank of England to cut interest rates to zero in the coming months.
According to CME Fed Fund Futures Monday, the probability of a rate hike by the US Federal Reserve in 2016 has fallen below 30%, from over 50% before the referendum.
The likelihood of a rate cut by September or November is now up to 18%, from almost zero last week.
A lower interest rate environment on the back of elevated economic and financial market uncertainty, has a "more fundamental and sustainable positive impact" on gold in the long run, compared with short-term safe haven gains, UBS precious metals analyst Joni Teves said Friday.
Meanwhile, the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, showed inflows of 26.4 mt for the week ended Friday, following the largest daily inflow since March of over 18 mt on the day of the referendum results.
The fund, which represents over half the total investment in gold-backed ETFs globally, has now added over 290 mt year-to-date, taking total additions for June to 66 mt.
Net long positions in silver increased 23% to a record 75,578 contracts, according to CFTC data, clearly benefitting from gold's price rise.
Platinum positions were down 6.2% on the week to a 12-week low of 15,046 net long contracts.
Palladium's net long position was down 8.2% to 3,628 contracts, the lowest since 2012.
