Hedge Funds Pulling Out Of Gold

A Bloomberg story reports that hedge funds have reduced their exposure to gold, to levels not seen since July of 2009.

“There’s been a lot of profit in gold, and people are getting nervous that there might not be more,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois. “The big boys are starting to get out. They know that these prices aren’t cheap in anybody’s mind.”...

“Interest rates are going to be rising worldwide,” Kaplan said. “I’m not convinced it’s over for gold yet, but it’s very close.”

Those hedge funds evidently see gold as toppy. There's no reason to classify these people as sheep, so they might be right about gold's near-term prospects. On the other hand, they know about gold and can shift back to the metal if they've underestimated its prospects.