Salient to Investors:

Hedge funds et al increased bets on a gold rally by the most in 3 weeks, while short contracts fell 9.2 percent, the most since March 19, though short holdings are still more than triple the average since 2006, when data begins. Net-bullish wagers across 18 US-traded raw materials jumped 28 percent, the biggest increase in 7 weeks.

Warren Buffett said gold has no appeal even after the slump and even if it went to $800, wouldn’t be a buyer. Analysts and traders are the most bearish since February 2010.

Alan Gayle at RidgeWorth Capital Mgmt said currency debasement and easing measures will support gold, while bulls still have a lot to prove and there is much skepticism surrounding gold.

Elliott Mgmt said gold remains the best store of value in an uncertain economy.

A majority of 38 analysts surveyed by Bloomberg said gold’s 12-year winning streak is over.

Goldman Sachs said on April 23 that gold may drop to $1,390 in 12 months, and Deutsche Bank predicts a drop to as low as $1,050.

Jim Russell at US Bank Wealth Mgmt said there are no catalysts for gold to rise, no inflationary worries, and gold is responding to the global deflationary pressure.

US Mint gold sales in April rose to the highest since December 2009, and the UK Mint is increasing output after demand more than tripled. Australia’s Perth mint stayed open through the weekend to meet orders that reached a 5-yr high. UBS said physical flows into India climbed to at least 5 times the average of the past 12 months.

IMF said central banks are adding to gold reserves that are at an 8-yr high.  Jason Toussaint at WGC said banks bought 534.6 metric tons in 2012, the most since 1964 and are on pace to exceed that in 2013.

Nic Johnson at Pimco said many have changed their minds and gone bearish on gold, but remains bullish.

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