STOCK MARKET WATCH -- Monday, 23 December 2013

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28. Hedge Funds Cut Gold Bull Bets Amid Record Outflows: Commodities

http://www.bloomberg.com/news/2013-12-22/hedge-funds-cut-gold-bull-bets-amid-record-outflows-commodities.html

Hedge funds got less bullish on gold before prices dropped to the lowest level since 2010, leaving the metal poised for the worst annual loss in 32 years as investors dump bullion at a record pace.

Money managers reduced their net-long position by 2.8 percent to 32,524 futures and options in the week ended Dec. 17, U.S. Commodity Futures Trading Commission data show. Short holdings climbed 1.2 percent to 75,199, within 6 percent of the record reached in July. Net-bullish holdings across 18 U.S.- traded commodities rose 8.5 percent to a seven-week high, led by soybeans, natural gas and cotton.

Investors pulled $38.8 billion from gold funds this year, the most in data going back through 2000, according to EPFR Global, a research company. Futures settled at a three-year low on Dec. 19 in New York, a day after the Federal Reserve cut the pace of its monthly bond purchases. Prices plunged 37 percent since reaching a record in September 2011, U.S. equities climbed to an all-time high and the dollar is poised for its strongest annual performance since 2008.

“Gold was probably one of the easiest shorts of all time,” said Uri Landesman, the president of New York-based hedge fund Platinum Partners who helps manage about $1.3 billion of assets. “It has fallen out of favor because people felt its general security wasn’t needed in this market. People wanted to take on risk this year.”