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.
The mere hint of a short-term fix to avoid default next Thursday knocked gold prices below $1,300 this week, with a further plunge as U.S. trade opened on Friday. For long-time investors, the irony looks so thick you could butter your toast with it.
Hedge funds’ combined holdings in gold futures increased to the most bullish since January on mounting concern that conflict in the Middle East will boost crude-oil prices, slowing economic growth and stoking inflation.
Both silver and gold bullion sit within the top 0.2% of US mutual funds over the last 10, five and three years. No guarantee that performance will continue, of course. But you might want to ask mutual-fund managers what they are planning to do in 2012.