Gold Bears Defy Rally as Goldman Closes Short Wager: Commodities

Hedge funds accumulated their second-biggest bet against gold on record just as prices rallied the most in 15 months on surging demand for coins and jewelry and Goldman Sachs Group Inc. ended a recommendation to sell.

The funds and other large speculators held 69,726 so-called short contracts on April 23, within 0.6 percent of the all-time high reached six weeks earlier, U.S. Commodity Futures Trading Commission data show. The net-long position dropped 25 percent to 46,168 futures and options. Net-bullish wagers across 18 U.S.-traded raw materials slid 5 percent, the third decline in four weeks, with cuts in silver, corn and gasoline.

Bullion rallied 11 percent since reaching a two-year low April 16. The U.S. Mint ran out of its smallest gold coin last week, with sales across its products poised for the best month since December 2009, and the U.K. Mint said purchases tripled. Premiums paid by jewelers in India (XAUINR), the biggest importer, to secure supply surged as much as fivefold in 10 days. Goldman said April 23 it closed a bearish recommendation, while saying further declines are likely.

“It’s bizarre that the price has come back so rapidly,” said Donald Selkin, who helps manage about $3 billion of assets as the chief market strategist at National Securities Corp. in New York. “After the big decline, demand jumped like crazy. It’s the old rubber-band theory: You stretch too far, and eventually, it snaps back. Banks came in to buy, and there is record demand for coins around the world.”

(Source: Bloomberg)

WTI Crude Declines to Pare Biggest Weekly Advance Since June

West Texas Intermediate fell for the first time in seven days as some investors speculated the biggest weekly advance since June is excessive.

Futures slid as much as 0.5 percent in New York after rising 2.4 percent yesterday on a drop in U.S. jobless claims. Prices dropped after failing to settle above a technical resistance level. WTI may advance next week on speculation that the European Central Bank will cut its key interest rate to a record low, a Bloomberg survey showed. Brent crude’s premium to WTI fell below $10 a barrel for the first time in 15 months.

“It’s profit-taking after the big gains,” said Tetsu Emori, a commodity fund manager at Astmax Asset Management Inc. in Tokyo. “The trend upward is quite strong. This should be temporary.”

WTI for June delivery slid as much as 48 cents to $93.16 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.31 at 10:24 a.m. Singapore time. The volume of all futures traded was 17 percent below the 100-day average. The contract rose $2.21 to $93.64 a barrel yesterday, posting the highest close since April 10 and the longest run of gains since July. Prices are up 6 percent this week and 1.6 percent this year.

Brent for June settlement declined 43 cents to $102.98 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $9.67 to WTI. It finished at $9.77 yesterday, the narrowest closing spread since Jan. 3, 2012. The gap reached an intraday record of more than $28 a barrel in October 2011.

(Source: Bloomberg)

WTI Crude Declines to Pare Biggest Weekly Advance Since June

West Texas Intermediate fell for the first time in seven days as some investors speculated the biggest weekly advance since June is excessive.

Futures slid as much as 0.5 percent in New York after rising 2.4 percent yesterday on a drop in U.S. jobless claims. Prices dropped after failing to settle above a technical resistance level. WTI may advance next week on speculation that the European Central Bank will cut its key interest rate to a record low, a Bloomberg survey showed. Brent crude’s premium to WTI fell below $10 a barrel for the first time in 15 months.

“It’s profit-taking after the big gains,” said Tetsu Emori, a commodity fund manager at Astmax Asset Management Inc. in Tokyo. “The trend upward is quite strong. This should be temporary.”

WTI for June delivery slid as much as 48 cents to $93.16 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.31 at 10:24 a.m. Singapore time. The volume of all futures traded was 17 percent below the 100-day average. The contract rose $2.21 to $93.64 a barrel yesterday, posting the highest close since April 10 and the longest run of gains since July. Prices are up 6 percent this week and 1.6 percent this year.

Brent for June settlement declined 43 cents to $102.98 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $9.67 to WTI. It finished at $9.77 yesterday, the narrowest closing spread since Jan. 3, 2012. The gap reached an intraday record of more than $28 a barrel in October 2011.

(Source: Bloomberg)