Gold Bears Return Before Yellen Signals More Easing: Commodities

 Investors got less bullish on gold as hedge funds doubled their short holdings just before prices erased a weekly loss and Janet Yellen pledged to press on with economic stimulus if confirmed as Federal Reserve chairman.

The net-long position in gold slumped 37 percent to 55,456 futures and options in the week ended Nov. 12, U.S. Commodity Futures Trading Commission data show, the biggest drop since February. Short bets climbed to 54,143, the highest since mid-August, from 26,490 a week earlier. Net-bullish wagers across 18 U.S.-traded commodities dropped 12 percent to 576,224 contracts as investors became more bearish on wheat and cut their silver holdings by the most in five months.

Gold is heading for the first annual loss since 2000 after some investors lost their faith in the metal as a store of value. Global equities advanced to the highest in almost six years last week and U.S. inflation is running at 1.2 percent, half the rate of the past decade. Bullion reached a record in 2011 as the Fed pumped more than $2 trillion into the financial system. Gold rallied as Yellen said Nov. 14 she’s ready to back stimulus until she sees robust economic growth.

(Source: Bloomberg)