Gold Bets Cut in Fastest Exit This Year

Hedge funds extended their fastest exit from gold this year, cutting bullish gold wagers for a third week.
The net-long position in New York futures and options fell 14 percent, U. S. government data show. Holdings tumbled 49 percent over three weeks, the most since December. Assets in exchange-traded products backed by the metal dropped to the lowest since 2009, as the World Gold Council said third-quarter global demand was the weakest in almost five years.
While prices had their biggest two-day rally since June at the end of last week, gold is still down 15 percent from this year’s peak in March. Investors’ appetite for bullion has diminished as the dollar strengthened to a five-year high, the Federal Reserve moved closer to raising borrowing costs, U. S. equities reached records and inflation failed to accelerate.
‘Gold has everything working against it,’ says an Edinburgh-based global thematic strategist at Standard Life Investments Ltd., which oversees $333.6 billion, said Nov. 13. ‘The strongest influence is the strengthening dollar, and that goes against all commodities. So, you have a backdrop of falling commodity prices, a strong dollar and equities, potential disinflation and some countries already in deflation.’

This post was published at TruthinGold on November 17, 2014.