Hedge Fund Gold Bets Less Bullish as Paulson Holds: Commodities

Hedge funds got less bullish on gold, cutting their net-long position to a four-month low, before prices capped the biggest weekly retreat since September.

Net holdings in futures and options tumbled 20 percent to 44,291 contracts in the week ended Nov. 19, the lowest since July 9, U.S. Commodity Futures Trading Commission data show. Short bets rose 16 percent to the highest since Aug. 6 and long wagers slid 2.5 percent. Net-bullish wagers across 18 U.S.- traded commodities fell 12 percent as investors became the most bearish on copper since July and cut their silver holdings by the most in five months.

Gold fell 6.1 percent this month, heading for the worst slide since June, when the metal reached a 34-month low. The Federal Reserve signaled Nov. 20 that it may ease stimulus in coming months. Billionaire John Paulson told clients the same day he personally won’t invest more money into his gold fund because it’s not clear when inflation will quicken. The U.S. cost of living declined in October for the first time since April, while wholesale prices fell for a second month.

(Source: Bloomberg)