Salient to Investors:

Hedge funds et al are making the biggest bet on a gold rally since January 22 amid mounting signs that the U.S. will lead a military strike against Syria drove prices to a three-month high. Net-bullish holdings across 18 US-traded commodities climbed to the highest since February.

Michael Cuggino at Permanent Portfolio Family of Funds said investors have sobered up with their perceptions of gold, with people talking about it as an investment again: physical demand never really tailed off.

Commodities beat equities, bonds and the dollar for a third month, the longest winning streak in 2 years.

The World Gold Council estimates demand for jewelry, coins and bars will reach as much as 1,000 metric tons in India and China in 2013. IMF data show gold sales by the Austrian mint expanded 79 percent from January to July versus a year earlier, Russia increased gold reserves in July to the most since at least 1993, with Kazakhstan and Guatemala adding to holdings.

Rob Haworth at US Bank Wealth Mgmt said the increase in gold has been because of some temporary factors, and with better economic news on the horizon, taper terror is back in the gold market.

Adrian Day at Adrian Day Asset Mgmt said the declines in commodities were overdone on concerns over China’s economy, but we are seeing a more realistic view of the Chinese economy. Day said people are also seeing that supplies will be up, but it’s not going to crush the market.

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