2014.03.1006:22:52UTC+00Gold, immensely bullish since 2012

Gold is picking up more attraction from hedge-fund managers but Goldman Sachs Group Inc. said its astonishing rally this year will slump soon.

Hedge funds and other speculators enlarged bets on higher prices for a fourth week in New York futures and are the most bullish since December 2012, government data reported. While gold is slated to its best start in six years after reaching $1,350 per ounce, Goldman Global Investment Research Jeffrey Currie said chances for escalating prices will fizzle to $1,000 for the first time since 2009.

This year’s 11% gain came despite signs of weakening US economic growth and Russia's invasion into Ukraine. Investors who dodged the metal last year were once more purchasing the largest exchangetraded product supported by gold, with holdings positioned for the 1st quarterly profit in a year. Also, hedge funds are adding to bullish stakes on sugar, corn, and coffee, pushing combined wagers on a commodity run to a record.

Weekly Gains

Gold futures in New York ascended 1.3% last week, the 8th advance this year. The Standard & Poor’s GSCI Spot Index of 24 raw materials gained 0.6%, while the MSCI All-Country World index of equities climbed 0.3%. The net-long position in gold advanced 3.8% to 118,241 futures and options in the week ended on March 4, based on the US Commodity Futures Trading Commission data. Short holdings slipped 15% to 26,321, the least since October. Net bullish holdings throughout 18 US-traded commodities increased 9.7% to 1.59 million contracts, the most since June 2006. 

US service industries, from health care to finance and comprise about 90% of the economy, progressed last month at the slowest move in four years, according to the Institute for Supply Management data March 5. Holdings through gold ETPs went up in February for the first time since 2012. SPDR Gold Trust assets, the largest fund, rose 0.9% in 2014 after a 41% dive last year that erased $41.8 billion in value.