“People are finally embracing equities,” said Troy Gayeski, partner and senior portfolio manager at New York-based SkyBridge Capital, which manages $7.4 billion of assets. “Investors woke up and said ‘Why do we own this?’ That’s when the gold selling started.”
Money managers took $2.6 billion from commodity funds in the week ended April 24, according to Cameron Brandt, the director of research for Cambridge, Massachusetts-based EPFR Global, which tracks money flows. Outflows from gold and precious-metals funds totaled $2.15 billion, he said.
Investors cut their silver net-long position by 26% to 5,689 contracts, the CFTC data show. Prices in New York jumped 3.4% last week, the most since January.
The hedge funds narrowed bets on a decline in copper to a net-short position of 15,727 contracts, from 27,412 a week earlier, the CFTC data show. Bullish oil wagers slid 0.3% to 182,408, the third decline. Palladium and platinum holdings also fell for a third week.
A measure of speculative positions across 11 agricultural products gained 1.1% to 106,391 contracts, a second consecutive gain. Holdings are rebounding after touching 56,404 on April 9, the lowest in more than six years. The S&P GSCI Agriculture Index of eight components slumped 1.9% last week and touched the lowest since June on April 24.
U.S. planting should increase as warm, dry weather firms muddy soils for farm machinery, Global Weather Monitoring said April 26. World grain production will increase 7% this season to 1.91 billion metric tons, as wheat output gains 3.8%, the London-based International Grains Council said a day earlier. The global corn crop will surge 10%.
“Unless we have a really bad summer, it’s tough for me to see a run up in grain prices,” said Rob Haworth, a senior investment strategist in Seattle at U.S. Bank Wealth Management, which oversees about $110 billion of assets. “In gold, we have some anecdotal signs of increased demand in the physical markets from China and India as they tend to bottom fish. We’ve found a temporary pause.”