Hedge funds raise gold bets as analysts predict more declines
It tumbled 28% last year and some see a further 19% fall to US$1,000 this year
Add BT as a preferred source[CHICAGO] Hedge funds have raised their bullish gold bets to a six-week high, splitting with analysts at Technical Research Advisors and Goldman Sachs who are predicting more declines after last year's rout.
The net-long position in gold jumped 19 per cent to 34,104 futures and options in the week ended Dec 31, US Commodity Futures Trading Commission (CFTC) data show. Short holdings slid 4.6 per cent to 72,571, the lowest since Nov 19. Net-bullish holdings across 18 US-traded commodities fell for the first time in six weeks as investors became the most bearish on sugar since September.
Gold tumbled 28 per cent last year, the first decline in 13 years and the biggest since 1981, after some investors lost faith in the metal as a store of value. The Federal Reserve on Dec 18 cut the pace of its monthly bond purchases. Bullion is poised to fall another 19 per cent in the coming months to US$1,000 an ounce, said Technical Research's Louise Yamada, who's the former head of technical research at Citigroup.
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