Gold bulls raise positions most in month on stimulus

Commodity Inflows

Gold funds had inflows of $399 million in the week ended Sept. 25, according to Cameron Brandt, the director of research for Cambridge, Massachusetts-based EPFR Global, which tracks money flows. Money managers added $536 million to commodity funds, the EPFR data show.

The net-long position in crude oil fell 2.1% to 275,098 contracts, the lowest since July 2, the CFTC data show. West Texas Intermediate, the benchmark U.S. grade, declined 1.7% to $102.87 a barrel last week. Crude inventories grew by 2.64 million barrels in the seven days ended Sept. 20, the first increase in four weeks, the Energy Information Administration reported Sept. 25.

Investors are holding a net-long position in copper of 5,284 contracts, up from net-short holding of 3,807 contracts a week earlier. Futures are up 8.9% since June, poised to snap three straight quarters of losses.

A measure of net-long positions across 11 agricultural products climbed 11% to 299,877 futures and options. The S&P GSCI Agriculture Index of eight commodities added 2.1% last week, the biggest increase since July 12.

Cattle Wagers

Bullish cattle wagers climbed 38% to 39,155 contracts, the biggest gain in six weeks, CFTC data show. Prices on the Chicago Mercantile Exchange rose for an eighth straight session Sept. 27, the longest rally since November 2008, on the prospect of shrinking U.S. herds.

The S&P GSCI gauge climbed 92% from the end of 2008 through June 2011 as record stimulus by the Fed improved demand for grains, metals and energy products. The U.S. economy will expand 2.7% next year, from 1.6% in 2013, according to the median of as many as 81 economist estimates compiled by Bloomberg.

“The anticipation is there will be some level of growth improvement from continued liquidity and government spending coming from QE will ultimately find its way into raw-material prices,” said Jeffrey Sica, who helps oversee more than $1 billion of assets as the president of Sica Wealth Management in Morristown, New Jersey. “It would be positive for commodity demand.”

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