New year gold price surprise for hedge funds
On Monday on the Comex market in New York, gold futures with February delivery dates jumped higher on the back of safe haven buying amid a global stock market rout and worries about escalating tensions in the Middle East.
In afternoon trade gold was exchanging hands for $1,074.20 an ounce, up $13.90 or 1.3% compared to Thursday's close.
Anticipation that the US Federal Reserve will raise rates from near zero where they have been since December 2008, prompted large futures speculators or "managed money" investors such as hedge funds to dramatically raise bearish bets on the metal, dumping more than 150,000 lots or the equivalent of some 425 tonnes of gold since November.
Net short positioning – bets that gold could be bought back at a lower price in the future – hit a fresh record during the final trading week of 2015.
According to the CFTC's weekly Commitment of Traders data released on Monday speculators cut back long positions – bets that prices will rise – and added to their short positions pushing the market into a overall bearish position of 24,263 lots or just over 2.4 million ounces.
It's the biggest net short position since at least 2009, when the Commodity Futures Trading Commission first began tracking the data, surpassing the previous record hit mid-December when gold dipped to its lowest in nearly six years at just above $1,050 an ounce following the Fed announcement.
Image of traders at Sao Paulo stock exchange by Rafael Matsunaga