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Investors Flee Gold as Long Positions Hunker Their 2002 low

17 Jul

Although gold is perched near its highest levels in nearly three weeks, investors remain wary of buying it. BofA analysts note that market players have largely liquidated their bullish bets on gold: at USD 2.1 billion, bullion long positions are hunkered at their lowest levels since 2002, the bank said.

mcx gold tradingGold has fallen out of favor with large speculators, according to data from Bank of America/Merrill Lynch, with positioning sliding to its lowest spot in nearly a decade.

Although gold is perched near its highest levels in nearly three weeks, investors remain wary of buying it. BofA analysts note that market players have largely liquidated their bullish bets on gold: at USD 2.1 billion, bullion long positions are hunkered at their lowest levels since 2002, the bank said.

Meanwhile, “speculative shorts in gold are their largest ever,” BofA added.

Despite global central banks’ having no intention of removing their collective foot from the monetary throttle anytime soon, gold bulls have been chastened by a dizzying selloff that has shaved more than 25 percent from bullion’s value in 2013.

Hedge fund guru John Paulson’s flagship gold fund has plummeted by more than 65 percent this year, according to reports.

Over the last week, gold has staged a modest rebound. Still, it is far from the heady days of 2011, when the Federal Reserve’s loose monetary policy prompted gold bugs to bid bullion up to a record USD 1,900 an ounce.

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BofA called market signals on gold “extreme” and said that positioning “remains in the contrarian buy zone,” given that the metal has broken above a near-term resistance area at USD 1,270 an ounce. That creates a “near-term base and positioning-led squeeze higher,” the bank added.

—By CNBC’s Javier E. David

Commodity Bets: How to trade Crude, Gold, Zinc & Lead

2 Jul

Sreekanth Jha of PJ Commodity Ventures suggests buying crude at Rs 5,800 per barrel for target of Rs 5,900 per bbl.

N Prasad of Safetrade Advisors recommends buying MCX gold at Rs 28,850 per 10gm with stop loss at Rs 25,600 per 10gm for target of Rs 27,170 per 10gm to Rs 27,200 per 10gm.

Reena Rohit of Angel Broking advises buying zinc July contract at Rs 110 per kilogram with stop loss at Rs 109 per kilogram for target of Rs 111 per kilogram on the upside.

Sugandha Sachdeva of Religare Commodities advocates going long on lead MCX July series at Rs 122 per kilogram with stop loss at Rs 120.50 per kilogram for targets of Rs 125.5 and Rs 126 per kilogram in near term.

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