While Deutsche Bank AG said July 8 that the worst of the selloff may have passed, banks including Goldman Sachs Group Inc. and Credit Suisse Group are forecasting more declines. Money managers’ holdings of short contracts reached 80,147 last week, the highest since the CFTC data begins in 2006. That can also magnify any rally as speculators close out bearish bets by buying contracts.

Assets in exchange-traded products backed by bullion have plunged 25 percent this year, wiping $59.8 billion from the value of the funds.

Stronger Dollar

Gold entered a bear market in April as U.S. inflation failed to accelerate as much as some bullion buyers had anticipated and equity markets rallied. The prospect of higher interest rates and a stronger dollar mean the recent gains may be short-lived, said John Goldsmith, the deputy head of equities with Montrusco Bolton Investments in Toronto.

“Gold may have gotten oversold and was due for a bounce, but a bounce doesn’t a bull market make,” said Goldsmith, whose company manages C$5.50 billion ($5.28 billion) of assets. “There’s upward pressure on rates and on the dollar.”

Money managers withdrew $1.42 billion from gold funds in the week ended July 10, according to Cameron Brandt, the director of research for Cambridge, Massachusetts-based EPFR Global, which tracks money flows. Total outflows from commodity funds were $1.68 billion, according to EPFR.

Net-long positions in crude oil climbed 6.9 percent to 281,918 contracts, the highest since May 2011, the CFTC data show. Prices climbed for three weeks, the longest rally since May, and on July 11 reached a 15-month high. U.S. inventories fell 5.1 percent in two weeks, the biggest plunge since at least 1982, Energy Information Administration data show.

Copper Holdings

The funds trimmed the net position in copper to a short 26,284 contracts, from 26,963 a week earlier. Imports of the metal by China, the biggest user, rose to a nine-month high in June, government data show. The decade-long bull market in commodities may extend for an additional 15 to 20 years, driven by urbanization and growing populations in countries including China and India, Michael Haigh, the head of commodities research at Societe Generale SA, said in Singapore last week.

A measure of net-long positions across 11 agricultural products tumbled 29 percent to 126,962 futures and options, the lowest since April. Investors more than doubled the bets on a decline in corn to 55,767 contracts, the highest since the data begins in 2006. Stockpiles in the U.S., the top grower, will more than double by the start of the 2014 harvest, the government said July 11.