Some investors are giving up on gold.
A rally in the price of gold at the beginning of the year has petered out, as an improving U.S. economy and receding inflation fears send money managers in search of better returns in stocks and bonds.
Gold prices are down more than 6% since they peaked for the year in mid-March, but they still are up for 2014 thanks to that blistering start. Hedge funds and other investors cut their net bullish bets on gold by nearly one-third in the past two months, according to Commodity Futures Trading Commission data. SPDR Gold Shares, the biggest exchange-traded fund that buys gold, has seen its holdings decline to the lowest level in more than five years.
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The miners have started 2014 very well indeed on the back of rising gold prices, so the question is; is this the real deal or another head fake? Is the bottom really in? Could there be a final capitulation just ahead of us? Will the summer doldrums take the PMs lower?
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