Hedge Funds Cut Gold Positions Due to Taper Fear

Hedge funds cut bullish gold bets, adding the most short contracts in four weeks, as U.S. economic growth fuels speculation the Federal Reserve will trim stimulus. Holdings across commodities dropped the most since April.
The net position in gold slid 13 percent to 87,689 futures and options in the week ended Nov. 5, U.S. Commodity Futures Trading Commission data show. Short bets jumped 37 percent, the most since Oct. 15, and long wagers fell 4.9 percent. Combined holdings across 18 U.S.-traded commodities dropped 20 percent to 658,263 contracts as investors cut cotton positions to the lowest this year and crude-oil bets to the fewest since June.

Gold has tumbled 23 percent this year, heading for the biggest drop since 1981, as some investors lost faith in the metal as a store of value. U.S. payrolls in October rose more than forecast, and the economy expanded at a faster pace than estimated last quarter, government reports showed last week, reviving concern the Fed may curb bond buying that helped fuel growth. Barclays Plc and Credit Suisse AG are predicting lower commodity prices as supplies increase.

via Bloomberg

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