Hedge funds increased bets on lower gold prices after investors pulled a record $20.8 billion from bullion funds this year while BlackRock Inc., the world’s biggest money manager, said it’s still bullish.
After rising for two consecutive weeks, the U.S. Comex gold futures fell 1% week-to-Tuesday to $1,448.80 although prices touched $1,458 on Wednesday Asian morning. The story of the week is still rising equities.
Hedge funds increased positions on a gold rally by the most in three weeks as central banks signaled no end to economic stimulus, driving prices higher just as analysts and traders turned the most bearish in three years.
Hedge funds accumulated their second-biggest position against gold on record just as prices rallied the most in 15 months on surging demand for coins and jewelry and Goldman Sachs Group Inc. ended a recommendation to sell.
Hedge funds and other speculators added to bullish gold bets as the metal slumped into a bear market and Goldman Sachs Group Inc. warned the retreat is accelerating after the longest rally in nine decades.
This past Thursday’s USDA plantings and grain stocks reports did a number on grains. The reports showed domestic corn supplies (old crop) higher than expected, and corn plantings this year if recognized will be the highest since 1936.
Investors are boosting wagers on higher commodity prices at the fastest pace in almost four years, rebounding from the least bullish position since 2009, on signs that the U.S. is accelerating and Europe’s debt crisis is easing.