Gold Commodity retreated, Bullion Slide

Gold bullion’s slide of as much as 9 percent this week took its drop from the record $1,923.70 an ounce reached in September to almost 20 percent, the common definition of a bear market, investors are still holding near the most metal ever in exchange-traded products, a wager now valued at $120.2 billion.

Gold commodity retreated the most in almost three months and more than $640 billion was wiped off the value of global equities on Dec. 14 after the Federal Reserve refrained from taking new stimulus measures. That combined with signs of increased funding stress in Europe helped drive the dollar to the highest since January against the euro. Gold typically moves in the opposite direction to the U.S. currency.

Gold bullion rose 12 percent to $1,592.70 an ounce this year on the Comex in New York. Even after this week’s rout, it’s still the third-best performer in the Standard & Poor’s GSCI gauge of 24 commodities, which fell 2.6 percent. The MSCI All-Country World Index of equities retreated 12 percent this year and Treasuries returned 9.6 percent, a Bank of America Corp. index shows.

Options traders are still bullish. The most widely held option gives owners the right to buy gold at $2,000 by March, data from the bourse show. The eight biggest holdings are all call options at 13 percent or more above prices today.

While investors cut 13.3 metric tons of gold from their ETP holdings yesterday, the most since Aug. 24, assets are less than 1 percent below the record set Dec. 14, data compiled by Bloomberg show. Holders have a combined 2,347.5 tons, greater than the reserves of all but four of the world’s central banks and equal to more than 10 months of global mine supply.