Hedge-fund managers are making the biggest ever bet against gold as billionaire George Soros sold holdings last quarter and Goldman Sachs Group Incorporated predicted more declines after the longest slump in four years.
The funds and other large speculators held 74,432 so-called short contracts on May 14, US Commodity Futures Trading Commission data show. That’s the highest since the data begins in June 2006 and compares with 67,374 a week earlier. The net-long position dropped 20 percent to 39,216 futures and options, the lowest since July 2007. Net-bullish wagers across 18 US-traded raw materials rose 1.1 percent to 588,482, led by gains in hogs, corn and cotton.
Gold prices that surged six-fold in the past 12 years fell 19 percent in 2013, including an eight-session slump through today in the longest since March 2009. Soros joined funds managed by Northern Trust Corp. and BlackRock Inc. in cutting holdings of exchange-traded products in the first quarter. ETP assets are now at the lowest since July 2011, after some investors lost faith in gold as a store of value amid improving economic growth, low inflation and a rally in equities.
Soros Fund Management LLC lowered its investment in the SPDR Gold Trust, the biggest bullion ETP, by 12 percent to 530,900 shares as of March 31, compared with three months earlier, a Securities and Exchange Commission filing showed May 15. The reduction followed a 55 percent cut in the fourth quarter last year.
