Hedge funds add record 61% to bullish gold bets

The gold price added $3 to end at $1,320 on Friday, making it the third straight week of gains for the precious metal.

Gold's $50 an ounce surge on June 19 startled what had been a sleepy market forcing the smart money to play catch up.

Data released after the close on Friday showed hedge funds and other large gold investors adding a record amount of ounces to their bullish positions.

According to Commodity Futures Trading Commission data bearish or short positions held by so-called managed money fell by nearly 25,000 contracts in the week to June 24.

Speculators added almost the same number bullish or long positions – bets that the price will go up – translating into a 61% net gain of 47,784 contracts or 4.8 million ounces.

This is probably the biggest weekly increase on record or at least since 2007 when the CFTC changed the way data is collected says Ole Hansen, head of commodity strategy at Saxo Bank.

It is also the the first time during the recent rally the increase was not only driven by short covering

Significantly, it is also the the first time during the recent rally the increase was not only driven by short covering but also the addition of new longs, according to the Danish bank.

On a net basis hedge funds now own net longs of over 120,000 lots or 12.1 million ounces, levels last seen in March when gold hit its 2014 high of $1,380.

Managed money is also moving heavily into silver with net longs increasing almost four-fold by 19,623 contracts to 24,757 almost equaling the February high of 25,090 contracts, CFTC data shows.

Precious metals have outperformed other commodities this year with double digit gains for palladium and gold and a strong performance for platinum and silver.

The positive momentum may now be spilling over to other sectors.

A  new survey by investment bank Credit Suisse of 350 investors, including institutions, hedge funds, large corporations and mutual funds show a change in sentiment to commodities:

"When asked 'What do you expect your level of investment to be over the coming 12 months?', 42% of respondents said 'overweight,'" – up sharply from the 19 percent who expressed such optimism in 2013 according to Credit Suisse.

Commodities futures: A mixed report card

Where The World's Biggest Worries Are

With US equity markets hovering near record-er highs, we thought a quick summary of the state of the world's growing geopolitical risks would 'help' rationalize the BTFATH mentality. Here is Deutsche Bank's map of the most potentially destabilizing risks around the world..

Chinese primary aluminum imports climbed 10.23% in May

The data released by the General Administration of Customs indicates that the imports of primary aluminum grew significantly during the month of May this year. On the other hand, the imports of waste aluminum by the country dropped during the month.

The country’s imports of primary aluminum totaled 24,049 tons during the month of May ’14. The monthly output rose 10.23% upon comparison with the output during the same month a year ago. The Chinese welded steel pipe imports had totaled 21,817 tons in May 2013.

As per Customs data, the country’s average import price of primary aluminum averaged at $ 2,026.78 per ton during the month of May.

The cumulative primary aluminum import by the country during the initial five months of the year totaled 212,484 tons, 162.11% higher when compared with the output during the corresponding five months during the previous year. The January-May primary aluminum imports had totaled 81,067 tons during 2013.

China imported 169,583 tons of waste aluminum during the month of May this year, falling by nearly 15% year-on-year. The cumulative imports of waste aluminum during the first five months of the year totaled 929,516 tons, marginally lower by 1.85% when compared with the imports during the corresponding five months in 2013.

China imported 282,969 tons of refined copper in May '14, says Customs data

The latest statistics released by the country’s General Administration of Customs indicates that the Chinese refined copper imports surged higher during the month of May this year. The country imported 282,969 tons of refined copper during the month. The imports during May ’14 were 21.89% higher when compared with the imports during the same month a year ago.

The average import price for refined copper during May ’14 was $ 6,925.74 per ton.

The refined copper imports by the country during the initial five-month period of the year totaled 1.63 million tons, rising significantly over the previous year. The imports jumped 48.84% higher when compared with the imports during the corresponding five-month period during 2013. The Chinese refined copper imports during January to May in 2013 had totaled 1.10 million tons.

Meanwhile, the country’s refined copper exports soared higher during May this year. According to Customs data, the exports of refined copper during the month totaled 28,149 tons, nearly 95% higher when compared with the exports during May last year.

The cumulative refined copper exports during the five-month period of the year totaled 105,204 tons, down 37.58% over the previous year.

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Stocks Slump As Fed's Bullard Warns The Market Is Wrong

 "Markets don't appreciate how close the Fed is to its goals," and thus tightening is the warning from the usually quite dovish Jim Bullard.

• BULLARD SAYS MARKETS DON'T APPRECIATE HOW CLOSE FED IS TO GOALS
• BULLARD SAYS HE'S TRYING TO PUT EMPHASIS ON CLOSENESS TO GOALS
• BULLARD: MARKETS SHOULD BE PRICING IN RATE INCREASES BASED ON WHAT THE FED SAYS
•  BULLARD: ECONOMY SHOULD BE ABLE TO HANDLE IT IF WE BEGIN TO PULL BACK FROM WHERE MONETARY POLICY IS NOW

Remember, don't fight the fed - unless they say sell?

And it seems the market that is 'wrong' is stocks; as bond yields continue to tumble to 4-week lows. Consider for a moment the many reasons why bonds would be here and now thanks to Bullard, they are front-running the equity sell-off (knowing that once stocks dump, it will all go into duration).