Hedge funds got less bullish on gold, cutting their net-long position to a four-month low, before prices capped the biggest weekly retreat since September.

Net holdings in futures and options tumbled 20 percent to 44,291 contracts in the week ended Nov. 19, the lowest since July 9, U.S. Commodity Futures Trading Commission data show. Short bets rose 16 percent to the highest since Aug. 6 and long wagers slid 2.5 percent. Net-bullish wagers across 18 U.S.- traded commodities fell 12 percent as investors became the most bearish on copper since July and cut their silver holdings by the most in five months.

Gold fell 6.1 percent this month, heading for the worst slide since June, when the metal reached a 34-month low. The Federal Reserve signaled Nov. 20 that it may ease stimulus in coming months. Billionaire John Paulson told clients the same day he personally won’t invest more money into his gold fund because it’s not clear when inflation will quicken. The U.S. cost of living declined in October for the first time since April, while wholesale prices fell for a second month.

“With the Fed perhaps stepping back, it’s hard to make a case for inflationary behavior out there,” said Jeffrey Sherman, a money manager who helps oversee $53 billion at DoubleLine Capital LP in Los Angeles. “People aren’t as worried about inflation, thus you’re not seeing people buying gold.”

Gold Bears

Futures dropped 3.3 percent last week, the biggest slide since Sept. 13. Prices fell to a four-month low on Nov. 21 after Fed minutes released a day earlier showed policymakers project enough strength in the labor market to warrant slowing bond buying. Nineteen analysts surveyed by Bloomberg News expect prices to fall this week, nine are bullish and three neutral, the largest proportion of bears since June 21.

Gold slumped 26 percent this year to $1,242.80 an ounce on the Comex in New York, heading for the biggest annual loss since 1981. The Standard & Poor’s GSCI gauge of 24 commodities dropped 3.4 percent. The MSCI All-Country World Index of equities climbed 18 percent, while the Bloomberg Dollar Index, a gauge against 10 major trading partners, rose 3.3 percent. The Bloomberg Treasury bond Index fell 2.4 percent.

Billionaire Paulson, who had so much conviction in gold that he used the SPDR Gold Trust exchange-traded product to start share classes for his funds denominated in bullion, told clients last week that he personally wouldn’t invest more money, according to a person familiar with the matter.

Paulson, Soros

Paulson’s sentiment echoes other investors who have lost faith in the metal as a store value. Global ETP holdings have dropped to the lowest since April 2010, with more than $73 billion erased from their combined value since the peak in October 2012, data compiled by Bloomberg show.