Salient to Investors:

Money managers cut their net-long position of futures and options to the lowest since July 2007, while holdings of short contracts rose to a record.

Dan Denbow, a fund manager at the $1 billion USAA Precious Metals & Minerals Fund said gold has so many drivers that it gets pushed around, making it impossible to determine a direction.

Nic Johnson at Pimco said gold volatility is temporary and investors will return to buy as a hedge against inflation. Johnson said gold is a diversifying element to people’s portfolios, the liquidation is more institutional, investors very much view gold the same, and volatility will decline back to historic levels.

Gold was the third-least volatile commodity in the past 5 years, behind cattle and feeder cattle, Natural gas and crude oil were the most volatile.

The WGC said central banks may buy as much as 550 tons in 2013 versus 534.6 tons in 2012.

Suki Cooper at Barclays said investor sentiment is negative and physical demand has started to slow. Ric Deverell at Credit Suisse said gold will trade at $1,100 in a year and below $1,000 in 5 years as inflation fails to accelerate.

Chad Morganlander at Stifel Nicolaus would underweight commodities until we see a pickup in global growth and a self-sustaining recovery in the US – the global economy has been decelerating, and China is struggling.

Read the full article at http://www.bloomberg.com/news/2013-05-26/gold-bets-reach-five-year-low-with-prices-whipsawed-commodities.html

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