Gold Bulls Retreat as Prices Drop to Four-Month Low: Commodities

Bloomberg (03/12) -- Hedge funds grew less bullish on gold for a fourth straight week, the longest stretch since November 2012, as mounting concern that the Federal Reserve will curb monetary stimulus sent prices to a four-month low.

The net-long position in gold fell 28 percent to 31,735 futures and options in the week ended Nov. 26, the lowest since June, U.S. Commodity Futures Trading Commission data show. Short bets rose 20 percent to 74,964, the highest since July. Net-bullish wagers across 18 U.S.-traded commodities gained 11 percent to 563,786 contracts as soybean holdings climbed. Bets on a decline for wheat prices reached a record. Gold is heading for the first annual drop in 13 years after equities rallied to the highest since 2008 and inflation failed to accelerate. Fed policy makers signaled Nov. 20 that the labor market will improve enough to warrant slowing their $85 billion of monthly bond purchases. U.S. manufacturing unexpectedly accelerated in November at the fastest pace in more than two years, a private report showed yesterday. Futures reached $1,217.10 an ounce after the close of regular trading in New York yesterday, the lowest since July 8. Eighteen analysts surveyed by Bloomberg News expect bullion to fall this week, nine were bullish and three neutral. The metal fell 5.5 percent in November, the biggest drop since June, when prices reached a 34-month low.