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Hedge Funds Are Selling Gold. Should You?

Lawrence Lewitinn
Talking Numbers
Hedge Funds Are Selling Gold. Should You?

Hedge funds are selling their gold, according to the Commodity Futures Trading Commission (CFTC). And it’s not in small amounts, either. Should you join them and sell your gold?

About $1.4 billion – or over 31 tons – of gold were sold by funds last week. Bullion is has been in sell-off mode since May 8 and is now down 8% from that day. Gold at one point got near its April low of $1,340 per ounce this morning. This is a far cry from April, though, when funds helped support falling gold.

The decline in precious metals isn’t limited to gold. Silver is at levels not seen since the fall of 2010, trading around $21 per ounce. The tarnished metal is down 11% since the start of the month. Things weren’t helped when a Citi report recommended selling silver should it rebound. Only two short years ago, silver was near $50 per ounce.

What’s helping make metals heavy is the rising US Dollar. Since February, the US Dollar Index is up 6%. A stronger dollar usually means less greenbacks are required to buy ounces of gold or silver.

Juan Carlos Artigas, Global Head of Investment Research at the World Gold Council, spoke with Talking Numbers about gold’s fundamentals and the role emerging markets central banks are playing in its demand.

See the video above for more of this interview and an analysis of the charts by Carter Worth, Chief Market Strategist at Oppenheimer.