Hedge Funds boost bullish to the peak mark on gold surge: Commodities
March 3, 2014 11:40 am
Hedge funds increased bullish gold wagers to the topmost mark in more than 14 months in the middle of surging concern that the U.S. economic recovery is in declining state.
The net-long position spiked up 25 percent to 113,911 futures and options in the week ended February 25, the peak point since December 2012, U.S. Commodity Futures Trading Commission information revealed. Net-bullish holdings across 18 U.S.-exchanged commodities bolstered 16 percent to 1.45 million contracts, the highest since April 2011. Coffee wagers achieved a 33-month high.
Investors’ return to gold after the bear market in 2013 drove financial values 6.6 percent greater last month, the most since July. The U.S. economy progressed at a slower pace in the fourth quarter than previously projected, giving the expansion less momentum heading into 2014. China’s yuan plunged down the most on record on February 28, adding to concern about emerging-market development and triggering demand for alternative assets.
“There are some major concerns about the erosion of the U.S. economy,” said Jeffrey Sica, who helps oversee more than $1 billion of assets as president of Sica Wealth Management in Morristown, New Jersey. “The devaluation of currencies will continue, and it’s going to further accelerate the upside appreciation of gold. As we see more trouble out of China and emerging markets, it’s going to become more of a safe-haven investment than it’s been in the past year and a half.”
Futures boosted 12 percent to $1,342.50 an ounce in New York this year. The Standard & Poor’s GSCI gauge of 24 raw materials surged 2.7 percent and the MSCI All-Country World Index of equities inched up 0.2 percent. The Bloomberg Dollar Spot Index, a gauge versus 10 major trading partners, relinquished 0.3 percent. The Bloomberg Treasury Bond Index soared 2 percent.
Home Sales
U.S. pending home sales in January increased less than projected, private figures showed February 28. The Labor Department said a day earlier that initial unemployment claims hiked by 14,000 to 348,000 in the week ended February 22, topping all economist projections in a Bloomberg survey. Assets in the SPDR Gold Trust, the biggest bullion-backed exchange-exchanged good, spiked up last month by the most since September 2012.
Gold’s 60-day historical volatility touched 16.75 on February 27, the weakest since April, when the metal slumped into a bear market. The decrease come after financial values were whipsawed in 2013, driving some investors to lose their trust in the metal as a store of value. In July, the 60-day measure reached the top most since April 2009. Open interest, or the number of contracts outstanding on the Comex, surged 4.3 percent in February, cutting down three months of pullbacks.
Physical Demand
Purchases of bars, coins and jewelry, which aided fuel this year’s to increase, are beginning to slow in the middle of price hikes. China’s gold imports from Hong Kong depreciates to 83.6 metric tons in January from 91.9 tons in December, according to data from the Hong Kong Census and Statistics Department February 25. Gold-coin sales by the U.S. Mint plummeted 66 percent in February from a month earlier to 31,000 ounces, the weakest mark since September.
Federal Reserve Chair Janet Yellen stated February 27 the bank will likely keep cutting down asset purchases as policy makers monitor economic data to know if the recent weakness is no permanent. The Fed slash monthly bond purchasing by $10 billion in the past two meetings, leaving purchases at $65 billion. Gold bolstered 70 percent from December 2008 to June 2011 as the central bank bought debt.
Prices decreased 28 percent last year, the most since 1981. Gold held in global ETPs plunged down 33 percent in 2013, and the value of the assets gave up $73.4 billion. Goldman Sachs Group Inc. sees the metal dropping to $1,050 by the end of the year.
‘Take Profits’
“Once we begin to see the U.S. economy gain momentum, then you will see the dollar strengthen and gold quickly give back gains,” said Paul Christopher, the St. Louis-based chief international strategist at Wells Fargo Advisors, which manages $1.4 trillion. “Our advice to investors is, use this rebound in gold to take profits and move the money elsewhere.”
Investors become bullish on copper for the first time in a month, with the net-long position touching 1,459 contracts as of February 25, compared with a net-short holding of 8,888 a week earlier, the CFTC data show. Inventories checked by the London Metal Exchange backslide for eight straight months, the longest streak since May 2012.
Bets on a rally for crude oil marched higher with 2.2 percent to 339,052 contracts, the most since data started in 2006. West Texas Intermediate increased 5.2 percent last month in New York. Supplies at Cushing, Oklahoma, the delivery point for the futures, achieved the weakest since October 18, the Energy Information Administration said February 26. The material has been provided by InstaForex Company – www.instaforex.com
Hedge funds increased bullish gold wagers to the topmost mark in more than 14 months in the middle of surging concern that the U.S. economic recovery is in declining state.
The net-long position spiked up 25 percent to 113,911 futures and options in the week ended February 25, the peak point since December 2012, U.S. Commodity Futures Trading Commission information revealed. Net-bullish holdings across 18 U.S.-exchanged commodities bolstered 16 percent to 1.45 million contracts, the highest since April 2011. Coffee wagers achieved a 33-month high.
Investors’ return to gold after the bear market in 2013 drove financial values 6.6 percent greater last month, the most since July. The U.S. economy progressed at a slower pace in the fourth quarter than previously projected, giving the expansion less momentum heading into 2014. China’s yuan plunged down the most on record on February 28, adding to concern about emerging-market development and triggering demand for alternative assets.
“There are some major concerns about the erosion of the U.S. economy,” said Jeffrey Sica, who helps oversee more than $1 billion of assets as president of Sica Wealth Management in Morristown, New Jersey. “The devaluation of currencies will continue, and it’s going to further accelerate the upside appreciation of gold. As we see more trouble out of China and emerging markets, it’s going to become more of a safe-haven investment than it’s been in the past year and a half.”
Futures boosted 12 percent to $1,342.50 an ounce in New York this year. The Standard & Poor’s GSCI gauge of 24 raw materials surged 2.7 percent and the MSCI All-Country World Index of equities inched up 0.2 percent. The Bloomberg Dollar Spot Index, a gauge versus 10 major trading partners, relinquished 0.3 percent. The Bloomberg Treasury Bond Index soared 2 percent.
Home Sales
U.S. pending home sales in January increased less than projected, private figures showed February 28. The Labor Department said a day earlier that initial unemployment claims hiked by 14,000 to 348,000 in the week ended February 22, topping all economist projections in a Bloomberg survey. Assets in the SPDR Gold Trust, the biggest bullion-backed exchange-exchanged good, spiked up last month by the most since September 2012.
Gold’s 60-day historical volatility touched 16.75 on February 27, the weakest since April, when the metal slumped into a bear market. The decrease come after financial values were whipsawed in 2013, driving some investors to lose their trust in the metal as a store of value. In July, the 60-day measure reached the top most since April 2009. Open interest, or the number of contracts outstanding on the Comex, surged 4.3 percent in February, cutting down three months of pullbacks.
Physical Demand
Purchases of bars, coins and jewelry, which aided fuel this year’s to increase, are beginning to slow in the middle of price hikes. China’s gold imports from Hong Kong depreciates to 83.6 metric tons in January from 91.9 tons in December, according to data from the Hong Kong Census and Statistics Department February 25. Gold-coin sales by the U.S. Mint plummeted 66 percent in February from a month earlier to 31,000 ounces, the weakest mark since September.
Federal Reserve Chair Janet Yellen stated February 27 the bank will likely keep cutting down asset purchases as policy makers monitor economic data to know if the recent weakness is no permanent. The Fed slash monthly bond purchasing by $10 billion in the past two meetings, leaving purchases at $65 billion. Gold bolstered 70 percent from December 2008 to June 2011 as the central bank bought debt.
Prices decreased 28 percent last year, the most since 1981. Gold held in global ETPs plunged down 33 percent in 2013, and the value of the assets gave up $73.4 billion. Goldman Sachs Group Inc. sees the metal dropping to $1,050 by the end of the year.
‘Take Profits’
“Once we begin to see the U.S. economy gain momentum, then you will see the dollar strengthen and gold quickly give back gains,” said Paul Christopher, the St. Louis-based chief international strategist at Wells Fargo Advisors, which manages $1.4 trillion. “Our advice to investors is, use this rebound in gold to take profits and move the money elsewhere.”
Investors become bullish on copper for the first time in a month, with the net-long position touching 1,459 contracts as of February 25, compared with a net-short holding of 8,888 a week earlier, the CFTC data show. Inventories checked by the London Metal Exchange backslide for eight straight months, the longest streak since May 2012.
Bets on a rally for crude oil marched higher with 2.2 percent to 339,052 contracts, the most since data started in 2006. West Texas Intermediate increased 5.2 percent last month in New York. Supplies at Cushing, Oklahoma, the delivery point for the futures, achieved the weakest since October 18, the Energy Information Administration said February 26.
The material has been provided by InstaForex Company – www.instaforex.com
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