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.
Eighty percent of gold company executives expect gold to continue rising in 2012 and a majority says it will peak at $2,000, according to the results of a new survey by PwC.
PwC’s 2012 Gold Price Report surveyed companies representing 26.5 million ounces of gold mined in 2011, and 37.75 million ounces to be mined in 2012.
The survey also said 62% of respondents reported the price of gold impacted their stock price, though less than expected. Gold has risen 23.4% so far this year, but the S&P/TSX Global Gold Index increased only 3.9% through November 30, 2011.
PwC attributes the disparity to the popularity of gold ETFs. More gold companies are using their extra cash to pay dividends to shareholders, according to the report. Dividend payments for the top 20 gold mining companies were up 44% from 2010.
Nearly a third of companies, or 29%, expect to spend their cash on acquisitions in 2012, against 19% in 2011, says PwC.
PwC calculates a total of 544 gold acquisitions were made in 2011 at an approximate value of $11.2 billion. As of November 30th, the M&A volume increased 12.6% from the same period last year but the value dropped by 38.4%.
The Telegraph points out that at $2,000/oz, gold would still be below the inflation-adjusted high the metal reached in 1980 of about $2,500, which followed the oil price shock resulting from the Iranian revolution.
Comments
Mikenwafor
Gold will definitely exceed the $2,000/ounce mark if left to market forces. The Eurozone crisis, US fiscal crisis, global inflation, etc. should all ideally drive capital to gold. However, the global financial cabal will manipulate the gold price using fictitious trades, over-supply, forced policies, etc. to protect the US $