Gold seen rallying from worst streak in eight years

Hedge funds buck expectations...

Annual Increase

Gold priced in the Indian currency rallied 10 percent last year, beating dollar-denominated bullion’s smallest annual increase in four years. The metal surged 21 percent in yen in 2012 and reached a 32-year high this week, data compiled by Bloomberg show.

In other commodities, nine of 12 traders and analysts surveyed expect copper to fall next week, two were bullish and one was neutral. The metal for delivery in three months, the London Metal Exchange’s benchmark contract, climbed 4.4 percent last year and was at $8,068.50 a ton today.

Six of 11 people surveyed expect raw sugar to gain next week and four predict a drop. The commodity traded at 19.1 cents a pound on ICE Futures U.S. after dropping 16 percent last year, its second consecutive annual decline.

Twelve of 24 people surveyed anticipate a gain in corn prices next week and 10 said the grain will drop, while 15 of 25 said soybeans will slide and seven expect rising prices. Twelve of 23 traders predicted cheaper wheat and nine were bullish. Corn rose 8 percent last year and was at $6.885 a bushel in Chicago as soybeans traded at $13.94 a bushel after rallying 17 percent in 2012. Wheat gained 19 percent in the period and was last at $7.5575 a bushel.

Commodities Performance

The S&P GSCI gauge of commodities posted its worst annual performance since 2008 even as Fed Chairman Ben S. Bernanke and European Central Bank President Mario Draghi pledged bond purchases. The IMF expects 3.6 percent global economic growth this year, up from 3.3 percent in 2012, with China’s expansion accelerating to 8.2 percent. The country is the biggest user of everything from copper to soybeans.

“The fiscal cliff hasn’t come out as well as everyone had hoped, but the key factor about the U.S. is that Bernanke still has the ability to continue to expand stimulus measures,” said Jeremy Baker, who manages about $830 million of assets at the Vontobel Belvista Commodity Fund in Zurich. “China is going to be supportive for industrial bulk-type commodities, and even for agriculturalcommodities.”

Bloomberg News

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