Hedge-fund managers are making the biggest ever bet against gold as billionaire George Soros sold holdings last quarter and Goldman Sachs Group Inc. predicted more declines after the longest slump in four years.
Billionaire investor George Soros joined Northern Trust Corp. and BlackRock Inc. in cutting holdings of exchange-traded products backed by gold before a bear market in prices last month, while John Paulson maintained a stake that lost about $165 million in the first quarter.
Gold futures tumbled below $1,400 an ounce, extending the longest slump in almost three months, as the dollar’s rally eroded demand for the metal as an alternative investment. Silver fell to a three-week low.
Goldman Sachs Group Inc. said that returns from commodities have diverged from developed equity markets amid expectations for rising metal stockpiles and energy supplies, maintaining its neutral outlook on raw materials.
Hedge funds accumulated their second-biggest bet against gold on record just as prices rallied the most in 15 months on surging demand for coins and jewelry and Goldman Sachs Group Inc. ended a recommendation to sell.
Gold futures, which fell into a bear market this month, are poised for more declines and may plunge to the lowest since September 2010, according to technical analysis by Fain Shaffer of Infinity Trading.