Managed Money Now Betting on Gold

Managed Money Now Betting on Gold

$GLD, $USD

FLASH: Gold’s rally could have further to run as hedge fund managers make more Bullish bets after last year’s extended Big Short.

The precious Yellow metal rose to a 10-month high at $1,346.80 Wednesday as analysts warn of a slowdown in global growth and central bank stimulus

Yet, the fast money has largely missed Gold’s move North as they have the move North in US stocks.

On the back of their record Short, money managers are just modestly allocated to Gold, according to futures positioning data from the end of January.

“Despite a more positive attitude, investors have not piled into gold, aggressively chasing the market,” a strategist at UBS Group AG wrote in an e-Mail Wednesday. “Reluctance lingers, and the risk is that with many market participants waiting to buy dips, there could be a lot of catching up to do if positive catalysts extend.”

We have recommended buying both Gold and miners this year, saying the metal should break out in Y 2019 because of a scarcity of havens. A Dovish Fed and major world central-banks buying are also providing Gold Bulls with energy.

Last year the Bears growled loudly, as hedge funds and other large speculators built up the biggest-ever net-Short position in Gold futures and options, according to US Commodity Futures Trading Commission figures going back to Y 2006. They were betting that Gold would remain under pressure as investors favored USD as a haven asset during the US-China trade war.

Not everyone believes managed money has a reason get in yet, thinking the Northside is limited on this move.

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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