Hedge funds’ bullish bets on gold jump to four-year high
Hedge funds and other large speculators boosted their net-long position in gold.
The gold price on Tuesday hovered around breakeven following last week’s slump trading at $1,242 an ounce.
The metal is down 5.2% so far in November and is now changing hands for over $500 less than this time last year.
Swiss bank UBS on Tuesday forecast further downside in the gold price lowering their one month price target to $1,180 an ounce and adjusting downwards the three-month prediction to $1,100, reports Kitco News:
Joni Teves, UBS analyst, said their revision focuses on three points. First, gold sentiment is much weaker than initially thought as evidenced by gold’s inability to rise even in the face of U.S. dollar weakness. Second, market participants are focusing on the expected tapering of the Federal Reserve’s quantitative easing program, and third, physical buying is subdued, with buying less seasonal this year and Indian buying curbed by the restrictions placed on the market by the country’s government and central banks.
Gold last traded below $1,200 an ounce at the end of June this year, a more than three-year low. The last time gold touched the $1,100 level was March 2010.
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Joni Teves, UBS analyst, said their revision focuses on three points. The 4th point is that UBS wants to buy gold at the lowest possible price so puts out these predictions in hope the price falls. Watch at some point in the near future USB will predict $1,400 gold so they can sell the gold bought at lower price