Gold Bulls Increase Wagers to Highest Since January

Bloomberg (03/9) -- Hedge funds and other speculators are making the biggest bet on a gold rally since January as mounting signs that the U.S. will lead a military strike against Syria drove prices to a three-month high. Gold, down 28 percent from the record set two years ago after some investors lost faith in the metal as a store of value, climbed for four weeks as the rout spurred demand for coins, bars and jewelry. Prices gained 6.3 percent in August, and U.S. equities fell the most in more than a year, as western nations debated a response to alleged chemical-weapons use in Syria. That increased concern about disruptions to Middle East oil supply that would raise energy costs and stoke inflation. Gold climbed 30 cents to $1,396.10 an ounce on the Comex in New York last week. Twenty-three analysts surveyed by Bloomberg expect prices to rise this week. Six were bearish and five neutral, leaving the highest proportion of bulls since March 8. Futures were down 0.3 percent at $1,392 today. The Standard & Poor’s GSCI Spot Index of 24 commodities gained 2.9 percent last month. The MSCI All-Country World index of equities dropped 2.3 percent, while the S&P 500 tumbled 3.1 percent, the most since May 2012. The Bloomberg Dollar Index, a gauge against 10 major trading partners, gained 0.8 percent and the Bloomberg U.S. Treasury Bond Index slid 0.8 percent. Commodities beat equities, bonds and the dollar for a third month, the longest winning streak in two years.