Hedge funds continue to bet on silver even as rally fades

New York

HEDGE funds expanded their bullish bets on silver to an all-time high even as this year's hottest metals rally began to fade.

Money managers added to their net-long positions in silver for the fourth time in five weeks, chasing the kind of returns that in the first three months of the year sent the precious metal to its best quarterly gain since 2012. The price surge is showing signs of fatigue, with futures posting two consecutive weekly declines and an almost 4 per cent drop for May.

Silver leapfrogged gold in mid-April as the best-performing precious metal as data signalled a resilient US expansion and a stabilising Chinese economy. The commodity entered a bull market a few days later. Optimism on the outlook for industrial demand has since wavered, as some factory gauges released this month fell short of expectatio…