Holdings in gold contracts reached the highest in almost 22 months as investors added to bets that prices will drop. Futures fell.
The aggregate number of futures contracts yet to be closed, liquidated or delivered rose to 459,657 yesterday, the highest since Jan. 22, 2013. Money managers have boosted their short wagers to the highest in four weeks, while long holdings dropped to the lowest since January, government data show.
Investor appetite for bullion has ebbed as the dollar jumped to the highest since 2009 against a 10-currency basket and the Federal Reserve moved closer to its first U.S. interest-rate increase in eight years, cutting demand for the metal as an inflation hedge. Gold futures slumped to the lowest in four years this month, heading for a second straight annual loss.
Gold futures for December delivery lost 0.3 percent to settle at $1,193.90 an ounce today on the Comex in New York. The metal fell to $1,130.40 on Nov. 7, the lowest since April 2010.
Aggregate trading was more than double the 100-day average for this time, data compiled by Bloomberg show.
Bullion has declined for two straight months, the longest slump this year, as U.S. equities surged to a record and inflation failed to accelerate. Fed officials said last month that lower energy costs may hold down consumer costs in the near term.