Hedge Funds Raise Gold Bets as Goldman Sees Decline: Commodities Bloomberg 07-29-13

Salient to Investors:

Hedge funds et al increased their net-long position in gold futures and options for the 4th consecutive week and the longest streak since October, while more than doubling bets on lower corn prices to a record net-short holding.

Jeffrey Currie et al at Goldman Sachs said gold will decline to $1,050 by the end of 2014 as the US economy improves, prompting less accommodative monetary policy.

Mark Luschini at Janney Montgomery Scott said buyers expect tapering to begin later than many anticipated.

IMF said Russia and Kazakhstan expanded their bullion reserves for a 9th straight month in June, and the World Gold Council said central banks will buy 400 metric tons in 2013, after adding 535 tons in 2012, the most since 1964.

Donald Selkin at National Securities Corp said resistance from people who got caught before will limit further upside and wait to see what the Fed will do.

Mining companies announced at least $15 billion of write-downs in the past 2 months.

John Paulson at PFR Gold Fund said accelerating inflation is a risk reiterated his commitment to buying gold and gold producers as a hedge against currency debasement as central banks pump money into economies.

Goldman pared its 12-month commodity-return forecast to 0.1 percent on July 22: agriculture and precious metals will lead declines.

Net-long positions in crude oil climbed to the highest since the CFTC data begins in June 2006.

Barclays expects copper supplies to exceed demand by 107,000 tons in 2013 and 387,000 tons in 2014.

Corn holdings are the most bearish since data began in 2006. US government forecasts American farmers will harvest record crops.

Jeff Sica at Sica Wealth Mgmt said supplies are high in many commodities amid economic slowdown that is accelerating worldwide.

Read the full article at  http://www.bloomberg.com/news/2013-07-28/hedge-funds-raise-gold-bets-as-goldman-sees-decline-commodities.html

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