Hedge funds and other speculators misjudged gold prices for a second time in three weeks.
Just after the investors sold bullion holdings for a second consecutive week, a disappointing U.S. jobs report sparked the biggest rally in prices since mid-March. Their funds fared better in the five preceding weeks, correctly adjusting wagers 80 percent of the time.
Investors who were anticipating gold’s 2014 rebound would fizzle had reason to be confident at the start of last week. As U.S. equities surged to a record, bullion slid to a seven-week low on April 1 as fewer traders saw the appeal of the haven asset. Three days later, the payrolls data drove shares lower and bullion prices 1.5 percent higher to $1,303.50 an ounce, the biggest gain since March 12.
“There’s a lot of risk to these markets,” said Uri Landesman, the president of New York-based Platinum Partners, which helps manage about $1.35 billion of assets. “There’s sort of a 50/50 chance we go to $1,400 or back to $1,200. It’s really a hard call to make. My gut feeling is that the equity markets turn down sometime soon. I think that gold could once again become a safe haven.”
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