Gold bull positions reach seven-week high before retreat

‘Numeric Obsession’

“The unemployment rate has been the single-most significant number that the Fed has been looking at, and that went up, so there is really no reason for the market to be worried,” said Jeff Sica, who helps oversee more than $1 billion as the president of Sica Wealth Management. “The Fed’s numeric obsession makes gold attractive as the bond-buying program and monetary debasement will continue.”

Commodity assets under management fell to $385 billion in April from $412 billion in March, Barclays Plc said June 7. The decline was paced by outflows from precious metals, the bank said. Gold may fall toward $1,000 by 2015, Nouriel Roubini, professor of economics and international business at New York University, said June 1.

Investors pulled $1.23 billion from gold funds in the week ended June 5, according to Cameron Brandt, the director of research for Cambridge, Massachusetts-based EPFR Global, which tracks money flows. Total outflows from commodity funds were $1.68 billion, according to EPFR.

Crude Oil

Wagers on a rally in crude oil dropped 2.5% to 212,127 contracts, a second straight reduction, the CFTC data show. Investors trimmed their bets on a decline for copper to 6,626 from 8,872 a week earlier. The funds have been bearish on the metal since February and also have short positions in coffee, sugar, soybean oil, wheat and ultra-low-sulfur diesel.

The funds boosted their bearish position in coffee to 22,842 contracts from 20,991 a week earlier. Prices dropped for four straight weeks, the longest slump since February. Supplies of unroasted beans from Brazil, the top shipper, rose 22% in May from a year earlier.

The S&P GSCI lagged behind the MSCI All-Country World Index for six months, the longest stretch since 1998. Goldman Sachs Group Inc. and Citigroup Inc. are predicting the end of the decade-long bull market as prices that more than doubled spurred expansions at mines, farms and oil fields.

A measure of net-long positions across 11 agricultural products climbed 3.4% to 303,672 futures and options. The S&P Agriculture Index of eight commodities declined 7.6% this year.

“There’s a lot of excess capacity, so commodity prices are reflecting that,” said Donald Selkin, who helps manage about $3 billion of assets as chief market strategist at National Securities Corp. in New York. “Inflation is very, very low, and commodities represent inflationary expectations to a great extent. For sure, the bull run is over.”

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