Hedge funds are the most bullish on gold since August, defying Goldman Sachs Group Inc.’s prediction that the rally in prices will fade.
The net-long position in New York futures and options climbed for a fourth week, the longest stretch of increases since July, government data show. Futures jumped 2.7 percent last week, the most since June, as a plunge in global equities erased about $2 trillion from the value of stocks.
Holdings in exchange-traded funds backed by gold rose for the first time since October as investors sought protection from the rout. While prices are heading for a second consecutive month of gains, Jeffrey Currie, Goldman’s head of commodity research, says bullion will drop as the U.S. economy improves.
“We are seeing safety trade toward gold,” Peter Sorrentino, a senior vice president who helps oversee $1.8 billion at Huntington Asset Advisors in Cincinnati, said Dec. 11. “Investors have begun to see that the equity market is priced for a scenario that may not come to pass. That’s led some to flee the market and use gold as a storehouse.”
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