• Thursday, May 30, 2024
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BusinessDay

Gold bears pull $20.8 billion as money managers says buy

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Hedge funds increased bets on lower gold prices after investors pulled a record $20.8 billion from bullion funds this year while BlackRock Incorporated, the world’s biggest money manager, said it is still bullish.

Referring to U.S. Commodity Futures Trading Commission, Bloomberg report said that speculators held 67,374 so-called short contracts on May 7, 6.4 percent more than a week earlier. The net-long position dropped 10 percent to 49,260 futures and options. Net-bullish wagers across 18 U.S.-traded raw materials climbed 5.8 percent to 582,265, with gains for cocoa, cotton and hogs.

Gold is having its worst start to a year since 1982 after dropping 15 percent and sliding into a bear market in April. Holdings in exchange-traded funds backed by bullion tumbled to the lowest since July 2011 even as central banks print money on an unprecedented scale to boost growth. BlackRock’s President Robert Kapito said May 9 he would still buy the metal, echoing billionaire John Paulson, who’s sticking with a bullish view even after losing 27 percent in his Gold Fund last month.

Gold futures fell 1.9 percent to $1,436.60 an ounce on the Comex in New York last week. The Standard & Poor’s GSCI Spot Index of 24 commodities slid 0.3 percent, and the MSCI All-Country World of equities added 0.9 percent.

Bullion slumped last week after a May 9 government report showed the average number of Americans filing for jobless benefits over the past month dropped to the lowest since November 2007.

Money managers withdrew $1.27 billion from gold and precious-metals funds in the week ended May 8, according to Cameron Brandt, the director of research for Cambridge, Massachusetts-based EPFR Global, which tracks money flows.