Hedge funds are pulling out of gold
Money managers cut their bets on a bullion rally at the fastest pace in five months as prices head for their worst quarterly loss in a year. Graphics by Naveen Kumar Saini/Mint
Hedge funds are pulling out of gold bets as more exciting moves in equities and cryptocurrencies make safe-haven investments look boring.
Money managers cut their bets on a bullion rally at the fastest pace in five months as prices head for their worst quarterly loss in a year. Speculators are throwing in the towel as the metal failed to sustain the gains that took futures to a one-year high in September.
While the metal posted some modest gains recently, its performance still pales in comparison to the record-breaking rally of US equity indexes and the dizzying surge in bitcoin. Synchronized global growth and prospects for higher US interest rates hurt the appeal of non-interest bearing gold, while geopolitical tensions failed to spur enough haven demand.
Oil rally fizzles for third week
Crude’s rally fizzled out for a third week, with prices stalled near $57 a barrel as concerns over excess supplies next year temper enthusiasm for Opec’s extended production curbs.
Futures in New York closed on Friday just about where they started on Monday, with small gains over the past two days merely offsetting losses in previous sessions.
While the halt of the Forties pipeline in the North Sea sent prices surging and the International Energy Agency said on Thursday that Opec and its allies had managed to reduce global stockpiles to the lowest level in two years, the agency also cautioned that supply growth would outpace global demand in 2018.
But, for the quarter, prices are up 11%.
US industrial output moderates
US industrial production rose at a slower pace in November as factory output moderated following the biggest advance in more than seven years that reflected a hurricane-related surge, Federal Reserve data showed on Friday.
Three straight months of increased factory output show that manufacturing remains on solid ground amid steady consumer spending and strong gains in business investment. An improvement in overseas markets may also boost export demand in coming months.
The latest advance in manufacturing production reflected a widespread increase in the output of durable goods, driven by primary metals. In a sign factories are putting more resources to use, capacity utilization at manufacturers climbed to 76.4%, the highest since May 2008.
Total industrial production was driven by a 3% increase in oil and gas extraction as activity returned to normal levels following Hurricane Nate, the Fed said. Excluding the rebound in energy extraction, total industrial output would have been unchanged.