Hedge funds bet wrong on US crude before slump, right on gold
* Funds put $3.3 bln into new crude longs before market fell
* Bets on gold turned right as price rallies 3rd week in row
NEW YORK, July 26 (Reuters) - Hedge funds took huge positive bets on U.S. crude oil this week just before the market turned south but they had better luck going long on gold as the precious metal rallied, trade data and price charts showed on Friday. Positive wagers placed by money managers on contracts of West Texas Intermediate (WTI) crude oil reached a new record high for the week ended July 23, data from the Commodity Futures Trading Commission (CFCT) showed. The CFTC's definition for money managers include hedge funds and other big speculators in commodities. That group had banked on a rally in U.S. crude that began at end-June to extend into a fifth straight week this week. The market fell instead on worries about falling demand for oil in China, the No.2 consumer for the commodity. Since Tuesday, the cut-off date for calculating the CFTC's weekly data across U.S. commodity markets, WTI had been on the decline. It fell nearly 3 percent from the previous Friday to settle at $104.70 a barrel this Friday. That technically meant a loss for money managers who put up an estimated $3.3 billion in new net long positions of WTI between the weeks ending July 19 and July 23. The estimate was arrived at based on Reuters calculations of the difference in the closing price of WTI between the two weeks, multiplied by the number of new net long contracts wagered by the managers. CFTC data showed that combined net long futures and options of WTI, traded on New York and London exchanges, rose by 29,477 contracts in the week to July 23 to reach a new peak of 387,041.
Gold, unlike crude oil, extended its rally this week for a third straight week despite some corrections since Tuesday's close. The shiny metal's price hit a near 3-year low at the end of June but rebounded after the U.S. Federal Reserve indicated it is not ready to dramatically cut back on its economic stimulus as feared by the market. On Friday, the most-active U.S. gold futures contract on the COMEX division on the New York Mercantile Exchange closed at $1,321.50 an ounce, up 2.2 percent from a week ago. That potentially rewards hedge funds and speculators who put up $1.94 billion worth of new net long wagers on gold. CFTC data showed options and futures of COMEX gold rising by more than 14,500 contracts to reach a total of more than 70,000 in the week to July 23.
(Editing by Andrew Hay)