Loading ...Hedge Funds’ Big Short Could Be Fool’s Gold
Investors haven’t been this bearish for years. Are they wrong?
For all that, there’s reason to think a corner could be approaching. It’s always darkest before the dawn, and extremely bearish positioning often heralds a turn north: Comex copper broke a six-week falling streak last week, just after funds built their biggest net short since Trump was elected.
It’s worth looking at the calendar, too. After January, August is arguably the most consistently bullish month for gold. Last year, spot metal rose 4.1 percent during the month. In both 2016 and 2017, ETFs added about 4 percent to their holdings over the three months leading up to the Hindu Diwali festival at the end of October, a traditional period of gold-giving.
On top of that is the currency factor itself. The dollar index fell Friday after the GDP report underperformed some of the market’s rosier expectations. The meeting of the Federal Reserve this Wednesday is almost certain to keep rates on hold before raising again in September, based on market pricing. Chairman Jerome Powell’s statements that he’s more worried about lower than higher inflation in remarks to Congress earlier this month suggest he’s happy to let the economy run hotter before pushing rates up much further.
Don’t Give Up
Spot gold is at its lowest levels in a year. But the end of July is often a turning point
https://www.bloomberg.com/view/articles/2018-07-30/hedge-funds-big-short-could-be-fool-s-gold