Hedge funds slash bullish wagers on gold over Trump election win
Hedge funds and other large speculators boosted net-long positions by 11% to 197,362 as of Nov. 12, the lowest in 14 weeks.
By Marcy Nicholson
NEW YORK, June 30 (Reuters) – U.S. Mint American Eagle gold coin sales in the first half of 2017 were the lowest for this period in a decade, while sales of silver in the period were the weakest since 2008, government data showed on Friday.
U.S. Mint sales of American Eagle gold coins totaled 6,000 ounces in June, down 92 percent from June 2016 and bringing the tally for the first half of the year to 192,500 ounces.
Sales of American Eagle silver coins totaled 986,000 ounces in June, down 65 percent from a year ago. This brought sales for the first six months of 2017 to 12.2 million ounces, the weakest for the period since 2008.
Spot gold prices rose around 8 percent in the first half of the year, in sharp contrast to a 25 percent rally in the same period of 2016 that spurred strong interest in the physical market.
Prices of spot silver were also relatively lackluster the first half of this year, rising around 4 percent. This compares with a 35 percent surge in the first six months of 2016.
“U.S. investors seem to be interested in equities since every day seems like a bull market,” said Terry Hanlon, president of Dillon Gage Metals.
“The news is positive for stocks and mostly negative for metals; therefore, money is not going into the purchase of U.S. Mint American Eagles.”
The S&P 500 and the Dow Jones Industrial Average both set fresh all-time highs earlier this month as investors regained confidence in the U.S. economy after upbeat comments from Federal Reserve officials.
Hanlon also noted that larger investors and institutions were seeking products that carry lower premiums, such as 1 kilogram (32 troy oz) gold bars.
“There is the concern over the Federal Open Market Committee policy and the increasing interest rates scenario in the United States, and that’s stemmed some of the interest for investors to buy physical precious metals,” said Roy Friedman, president of Manfra, Tordella and Brookes.
The Fed raised U.S. interest rates earlier this month, marking the fourth such move as part of a normalization of monetary policy that began in December 2015.
In late 2016, after Donald Trump’s surprise victory as U.S. president, many traditional bullion holders in the United States held off buying gold as a safe haven as they were optimistic after voting for him.
(Editing by G Crosse)
