Hedge funds got less bullish on gold for the seventh time in eight weeks as the U.S. economy strengthens and inflation fails to accelerate, driving prices to the biggest annual drop in more than three decades.
The net-long position in gold fell 12 percent to 28,702 futures and options in the week ended Dec. 24, U.S. Commodity Futures Trading Commission data show. Short holdings gained 1.1 percent to 76,052, a three-week high. Net-bullish holdingsacross 18 U.S.-traded commodities climbed 4.5 percent to 768,354 contracts as copper wagers gained to a 34-month high.
Investors shunned gold in 2013, halting 12 straight years of price gains. Global equities rallied on improving growth prospects and inflation failed to accelerate, eroding demand for bullion as a preserver of wealth. Assets in exchange-traded products backed by bullion fell to the lowest since 2009 as holders including billionaires George Soros and John Paulson sold. The International Monetary Fund signaled this month the U.S. economy will expand more than forecast.
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