Investors cut wagers on a rally in commodities by the most
since November as signs of improving U.S. growth reduced demand for gold and
rains in South America added to signs that crop harvests will be bigger.
Hedge funds and other large speculators reduced net-long
positions across 18 U.S. futures and options in the week ended Feb. 12 by 15
percent to 757,060 contracts, the largest decline since Nov. 13, U.S. Commodity
Futures Trading Commission data show. Bets on higher gold prices fell to the
lowest since December 2008, while a measure for 11 farm goods slumped the most
since November 2011.
Gold prices are down 4 percent since Dec. 31, the worst
start to a year since 2001, as U.S. retail sales climbed for a third month in
January and consumer confidence rose more than forecast in February. Combined
soybean production in Argentina and Brazil will increase to a record and rising
output of corn will help replenish global inventories after drought last year
sent prices of both crops to a record.
“As confidence is building in an economic recovery that’s
sustainable globally, you could lose a bid to gold,” said James Paulsen, the
Minneapolis-based chief investment strategist at Wells Capital Management,
which oversees about $325 billion of assets. “Agricultural commodities to me
are going to have a pullback year as weather normalizes.”
The Standard & Poor’s GSCI Spot Index of 24 commodities
fell 0.3 percent last week, led by declines in silver and cocoa. The MSCI
All-Country World Index of equities slid 0.2 percent, while the dollar rose 0.4
percent against a basket of six trading partners. Treasuries fell 0.1 percent,
a Bank of America Corp. index shows.
(Source: Bloomberg)
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