Hedge funds raised bullish gold wagers to the highest in eight weeks as signs of stronger Chinese demand drove prices to the longest rally since August. Goldman Sachs Group Inc. says the gains will be short-lived.
After more than a decade of perpetual strength, gold suffered its worst losses since the early 1980s. Many investors have eschewed the metal in favor of stronger markets; however, this has helped to return this long-term bull market to health.
Gold, heading for the biggest slump in three decades, reached the lowest price since June as an improving economy cut demand for wealth protection. Silver prices touched the lowest in more than four months.