Hedge funds remain ultra-bearish on gold price

On Monday, gold had another quiet day in New York with December deliveries priced at $1,115.90 an ounce in afternoon trade, up $3.30 from Friday's close.

Gold is up 3% from a more than five-year closing low of $1,084 struck a fortnight ago with China's shock currency devaluation last week boosting its allure as a storer of wealth.

But gold's fightback has not convinced speculators on t114he futures market that prices are set to rise further.

Last week large gold futures investors such as hedge funds, referred to as "managed money", continued to hold near record short positions and added only slightly to their long positions.

In the week to August 11 according to the Commodity Futures Trading Commission's weekly Commitment of Traders data speculators' short positions – bets that gold could be bought cheaper in the future – was down slightly to more than 11.4 million ounces (323 tonnes).

Longs grew by less than 600,000 ounces, but on a net basis hedge funds remain short of the metal.

Speculators went into a net short position during the week to July 21 – the first time since at least 2006, when the data was first being tracked.

Any sustained move higher could see a scramble for gold on the futures market with some analysts estimating that short covering alone could take gold $50 higher from today's level.