Hedge Funds Retreat From Gold Fearing Fed Tapering

Hedge funds cut bullish gold bets by the most since June amid speculation about whether the Federal Reserve will begin trimming its monthly bond purchases.
Money managers cut their net-long position by 27 percent to 48,103 futures and options by Aug. 6, U.S. Commodity Futures Trading Commission data show. Holdings of short contracts rose 26 percent. Net-bullish bets across 18 U.S.-traded raw materials dropped 19 percent to the lowest since March and a measure of wagers across agricultural commodities turned negative for the first time on record.

Gold fell into a bear market in April as some investors lost faith in the metal as a store of value and inflation failed to accelerate amid unprecedented money printing by central banks. Charles Evans, Sandra Pianalto and Richard Fisher, regional Fed presidents in Chicago, Cleveland and Dallas, said last week that policy makers may be closer to tapering debt buying as the labor market recovers. U.S. jobless claims fell in the four weeks ended Aug. 3 to the lowest since November 2007

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza