Gold Bulls Increase Wagers to Highest Since January: Commodities – Bloomberg 09-01-13

Salient to Investors:

Hedge funds et al are making the biggest bet on a gold rally since January 22 amid mounting signs that the U.S. will lead a military strike against Syria drove prices to a three-month high. Net-bullish holdings across 18 US-traded commodities climbed to the highest since February.

Michael Cuggino at Permanent Portfolio Family of Funds said investors have sobered up with their perceptions of gold, with people talking about it as an investment again: physical demand never really tailed off.

Commodities beat equities, bonds and the dollar for a third month, the longest winning streak in 2 years.

The World Gold Council estimates demand for jewelry, coins and bars will reach as much as 1,000 metric tons in India and China in 2013. IMF data show gold sales by the Austrian mint expanded 79 percent from January to July versus a year earlier, Russia increased gold reserves in July to the most since at least 1993, with Kazakhstan and Guatemala adding to holdings.

Rob Haworth at US Bank Wealth Mgmt said the increase in gold has been because of some temporary factors, and with better economic news on the horizon, taper terror is back in the gold market.

Adrian Day at Adrian Day Asset Mgmt said the declines in commodities were overdone on concerns over China’s economy, but we are seeing a more realistic view of the Chinese economy. Day said people are also seeing that supplies will be up, but it’s not going to crush the market.

Read the full article at

Click here to receive free and immediate email alerts of the latest forecasts.

Gold Traders Most Bullish Since March as Paulson Cuts – Bloomberg 08-16-13

Salient to Investors:

The World Gold Council data show that consumer buying of gold rose 53 percent in Q2 from a year earlier, almost making up for the record sales of gold ETPs. The Council sees a dampening of demand in the next few months in India due to restrictions on imports, but says 2014 consumption should be higher than last year in India and in China. The Council said countries added 534.6 tons to reserves in 2012, the most since 1964, and may buy 350 tons in 2013, Turkey’s bullion imports in 2013 through July were 80 percent higher than in all of 2012.

John Paulson, the biggest investor in the SPDR Gold Trust, cut his stake by 53 percent  and George Soros and Daniel Loeb sold their entire SPDR stakes in Q2.

Mark O’Byrne at GoldCore said people buying physical gold are more about having a store of wealth in the medium to long-term whereas the ETP liquidations are more the speculative side, and cites robust physical demand as people see gold as good value at these levels.

Goldman Sachs predicts gold will fall to $1,050 by the end of 2014 as central-bank purchases won’t be enough to prevent further declines.

David Burns at Commerzbank said trading in physical gold is good this year, and interest increased as prices fell, while fabricators are buying and private clients are seeing a second opportunity to enter the market.

Adrian Day at Adrian Day Asset Mgmt predicts gold will rise to $1,600 by year-end because investors overreacted to speculation that the Fed will taper and as governments maintain efforts to boost economic growth.

James Bullard at FRB of St. Louis said policy makers should be careful in changing course based solely on economic forecasts.

Short positions gained ninefold since November and reached a record July 9, while hedge funds et al increased net-long positions by 54 percent from a 6-year low set in June.

65 percent of economists expect the Fed to taper in September.

The IMF predicts global growth of 3.8 percent in 2014, versus 3.1 percent in 2013.

Georgette Boele at ABN Amro said the main reason commodities markets have been improving is better data globally and overall improvement in sentiment, and base metals will be relatively OK in an environment where the economy is improving.

Read the full article at

Click here to receive free and immediate email alerts of the latest forecasts.

Gold Seen Extending Rebound as Cyprus Revives Bulls: Commodities – Bloomberg 03-22-13

Salient to Investors:

Mark O’Byrne at GoldCore said there is a dawning realization that the crisis is far from over in Europe, while ultra-loose monetary policies will continue for the foreseeable future pushing up gold prices.

Adrian Day at Adrian Day Asset Mgmt said gold will continue its slow but steady recovery supported by monetary easing and Europe back on the front pages following the Cyprus fiasco.

Credit Suisse says gold is unlikely to return to its September 2011 record of $1,921, while Barclays and Societe Generale say the bull market has, or is close to, peaking.

The IMF predicts global growth of 3.5 percent in 2013.

Assets in gold ETPs reached an almost 7-month low of 2,452.2 tons on March 20. The US Mint sold 36,500 ounces of American Eagle gold coins so far in March versus 80,500 for February and 150,000 in January.

Commerzbank say it’s too early to call an end of the bull market due to low interest rates, currency devaluation and gold purchases by central banks. The WGC say nations added the most reserves in 2012 since 1964.

Filip Petersson at SEB said the current commodity correction as a buying opportunity and expects industrial metals to be the sector with the best potential – the US economy is showing strength and China is stable.

Read the full article at

Click here to receive free and immediate email alerts of the latest forecasts.

Gold Bets Cut by Most Since 2007 as Sugar Bears Grow – Bloomberg 02-25-13

Salient to Investors:

Hedge funds et al reduced net-long positions in gold futures and options by 40 percent last week, the biggest drop since July 31, 2007. Commodity bets across 18 US raw materials tumbled to the lowest since December 2011. Global holdings of gold ETPs fell by the most since August 2011.

James Dailey at TEAM Financial Asset Mgmt said talk about an exit strategy for the Fed has frightened people, and there’s a confluence of weak gold owners.

Adrian Day at Adrian Day Asset Mgmt said China’s demand for commodities will continue to support prices as it imports more energy, metals and grains.

SA Commodities said Brazil’s ports have 192 ships waiting to load 10.8 million tons of commodities versus 90 ships waiting to load 4.1 million tons a year ago.

Jeffrey Sica at Sica Wealth Mgmt said China can’t get enough to meet their demand for agriculture – despite sentiment around the funds selling off, the demand is still very much there.

Cameron Brandt at EPFR Global said money managers withdrew $828 million from commodity funds last week, while gold and precious-metals funds lost $870 million, the 7th straight week of net withdrawals.

Macquarie said world sugar output may exceed demand for a third consecutive year.

Donald Selkin at National Securities said the big crops indicate supply concerns will be lessened.

Read the full article at

Free email alerts of articles as soon as they are posted.

Gold Bears Braced for U.S. to China Growth Recovery: Commodities – Bloomberg 02-15-13

Salient to Investors:

20 analysts expect gold prices to fall next week, 11 to rise, 3 neutral – the highest proportion of bears since Dec. 30, 2011. Gold is below its 200-day moving average, indicating more declines may follow. Gold fell in March in 6 of the last 9 years.

Hedge funds have cut bets on higher gold prices by 56 percent since October, while investors cut record bullion holdings in gold ETPs in 2013 and added to funds backed by other precious metals used more in industry. Central banks from Brazil to Russia are buying more gold to diversify from currency holdings.

Industrial usage accounts for 10 percent of gold consumption, versus over 50 percent for silver, platinum and palladium. Barclays and Rabobank Intl say usage will outpace supply this year in tin, platinum and palladium, while corn, wheat and cocoa will have shortages in the 2012-13 season.

Andrey Kryuchenkov at VTB Capital said the global economic recovery is on track and persistently decent macro data is denying gold its safe-haven status, with better returns available elsewhere.

In Q4 2012, Soros Fund Management reduced its investment in the SPDR Gold Trust by 55 percent, Moore Capital Mgmt sold its entire stake in the SPDR fund and lowered holdings in the Sprott Physical Gold Trust, while Paulson & Co., maintained its stake.

Credit Suisse said gold is unlikely to return to its September 2011 high of $1,921.15 because of accelerating US growth and contained inflation. Goldman Sachs expects gold to rise to $1,825 in three months and peak in 2013.

The IMF predicts global growth of 3.5 percent in 2013 versus 3.2 percent in 2012. Economists expect US and Chinese growth to accelerate in coming quarters. The median economist expects US economic growth to accelerate every quarter in 2013 to 2.7 percent in Q4. China is expects to grow 8.3 percent in Q3 from 8.1 percent in Q1.

John Meyer at SP Angel Corporate Finance said a lack of imminent financial disasters is pushing investors towards a more risk-on approach and away from gold.

Adrian Day at Adrian Day Asset Mgmt is accumulating, saying the monetary backdrop remains extremely positive for gold.

Robert Keck at 6800 Capital said economic activity in China and the US is telling us that commodities are poised to rise – Europe maybe slow, but the global economy is growing.

Read the full article at

Free email alerts of articles as soon as they are posted.

Billionaires Soros, Bacon Cut Gold Holdings on Decline – Bloomberg 02-14-13

Salient to Investors:

George Soros and Louis Moore Bacon cut their stakes in gold ETPs in Q4 2012. Lone Pine Capital and Scout Capital Mgmt sold their entire stakes in the SPDR Gold Trust,  but John Paulson maintained his holding.

UBS reduced its one-month price target by 6.8 percent, saying economic optimism takes the shine off defensive assets including gold.

Hedge funds have cut bets on a gold rally by 56 percent since reaching a 13-month high in October.

Tom Kendall at Credit Suisse said it’s increasingly likely that prices peaked in 2011 and downside risks are building as the world expands.

Over 100 economists expect growth to accelerate in the US and China in the coming quarters.

Paul Dietrich at Foxhall Capital Mgmt said the economy is looking better, and many people have lightened up on gold and are moving to more remunerative assets like equities.

Adrian Day at Adrian Day Asset Mgmt said the economy is showing strength and people would rather invest in economically sensitive commodities and equities.

Read the full article at

Free email alerts of articles as soon as they are posted.

Speculators Boost Bullish Bets Most Since November: Commodities – Bloomberg 01-21-13

Salient to Investors:

Commodity speculators increased net-long positions last week by the most since Nov. 27.

Barclays says investors increased commodity holdings by $20.4 billion in 2012 versus $14.6 billion in 2011. Suki Cooper et al at Barclays said palladium will be the best performing precious metal in 2013 as supplies tighten and demand increases from China. Barclays expects energy and industrial metals to rise in 2013.

Mihir Worah at Pimco said increased investor flows into commodities are supported by fundamentals.

The median economist expects China’s growth to rise to 8 percent in Q1  and 8.2 percent in Q2.

Adrian Day at Adrian Day Asset Mgmt said higher taxes for Americans is going to have a lot of impact and may dim the outlook for commodity prices if consumer spending slows.

Cameron Brandt at EPFR Global said money managers added a net $861 million to commodity funds last week, while precious-metals funds had $39 million outflows.

John Kinsey at Caldwell Securities said the outlook for global growth has improved, with China’s a big factor because it’s the largest importer of almost any commodity, plus a new regime in Japan, and Europe gotten its act together.

Read the full article at


Free email alerts of articles as soon as they are posted.

Hedge Funds Cut Bets to 12-Week Low as Prices Drop: Commodities – Bloomberg 10-22-12

Salient to Investors:

Hedge funds cut bullish commodity bets to the lowest since July 24 on  speculation China and Europe aren’t doing enough to boost growth. Gold bets fell 7 percent, silver fell 5.8 percent.

Bill Greiner at Mariner Wealth Advisors said global growth weakening, China growth is pretty weak.

Barclays said China consumes 42 percent of the world’s copper, Europe 18 percent.

Jeffrey Sica at SICA Wealth Mgmt is bullish long-term, saying an improving US outlook and resilient global demand for raw materials will boost prices in the long-term – we still see an exorbitant amount of demand for commodities.

Cameron Brandt at EPFR Global said money managers added $90 million to commodity funds in the week ended Oct. 17, gold and precious metal funds lost $158 million, snapping 11 consecutive weeks of inflows.

Pengjiang Fu at Newedge Group said metals demand in China is really slow as economic growth cools – slack demand for raw materials from China may last 18 months.

Informa Economics said planting of corn, soybean and wheat in the US will increase in 2013.

Adrian Day at Adrian Day Asset Mgmt said China is still slowing, and Europe has made a lot of noise but little action. Day said there’s nothing to keep the strong rally going.

Read the full article at