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Alternative Market Briefing

Hedge funds finally cut bullish bets on gold

Monday, November 02, 2015

Komfie Manalo, Opalesque Asia:

Hedge funds have cut their bullish bets on gold after two months of placing wrong wagers on the yellow metal, just before the Federal Reserve triggered the biggest weekly price drop in two months, reported Bloomberg.

Data from the Commodity Futures and Trading Commission (CFTC) showed that hedge funds and speculators have reduced their net-long position for the first time in six weeks, as gold prices dropped 1.8% last week after the Fed announced it was still thinking of raising interest rates this year. That announcement reduced demand for the yellow metal as a store of value.

An estimated $1.05bn was wiped out last week from the value of gold-backed exchange-traded products, the biggest slump since late July.

Over the past two months, hedge funds were criticized for placing bets the wrong way on bullion and last week’s retreat from their bullish prospects came at the most fortunate time.

Gold is currently selling at around $1,139. The price went up around 0.4% in the last 30 days, down around 2.4% in the last 12 months, and down 15.4% in the last five years.

It seems that the major players within the gold market have turned bearish, reported ......................

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