Gold is the most bullish in a year on speculation
that investors are reducing near-record bearish bets after the biggest plunge
in prices since 1981. Short positions held by hedge funds and other large
speculators jumped almost fourfold from October to December 24 as the bear
market deepened the latest U.S. Commodity Futures Trading Commission data show.
Prices rebounded as much as 5.4% since slumping to a six-month low on December
31. Gold retreated for the first time in 13 years in 2013 as an improving
economy spurred speculation the Federal Reserve would curb stimulus. More than
$73.4 billion was erased from the value of gold-backed funds as some investors
lost faith in the metal as a store of value. Bullion rallied as much as 21% in two
months through August as traders cut short positions and prices that slipped to
a 34-month low in June boosted demand for jewelry, coins and bars.
Bullion rose to near a
three-week high of $1,246.46 an ounce today, rebounding from last year’s 28% slide.
Bullion slipped the past four months and reached $1,182.27 on December 31,
within 0.1% of the June low, and it rebounded since then as some investors closed
out bearish wagers, and as physical buyers viewed prices near $1,200 as
attractive. The U.S. Mint sold 56K ounces of American eagle gold coins in
December, the most since June and contributing to a 14% gain in annual sales,
data shown on its website. Australia’s Perth Mint sold 41% more gold in 2013
and Turkey’s imports climbed 64% last month to the highest since July, data on
the Istanbul Gold Exchange’s website show.
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