Hedge funds may be back on the gold bandwagon.
After a difficult two months for the precious metal, hedge funds raised the bullish bets on gold by the most in that period, the Commodity Futures Trading Commission said. Speculative net-long positions increased by 35%, the largest jump since the middle of March, about a month before a major swoon cost gold-bug hedge funds, notably Paulson & Co. and Greenlight Capital, dearly.
The resurgence is credited to the weaker-than-expected U.S. economy, leading to speculation that the Federal Reserve would maintain its stimulus programs. Most of the gain in net-long positions actually comes from a big drop in short positions, rather than a huge number of new long bets.
Shorts against gold hit a record two weeks ago.