Gold still up 14 pct year-to-date

(Reuters) – The recent sell-off in gold may not be enough to make some hedge funds with long-term bull positions change their views that the metal is still one of the best bets for profit in a perilous global economy.

Gold has droppped around 11 percent since the start of last week as liquidity-strapped investors scrambled to convert gold into cash amid fears over Greece’s near-bankruptcy, likely hitting a number of hedge funds which have profited from its bull run in recent years.

However, the yellow metal is still around 7 percent above its level at the start of July, and is up 14 percent this year, leaving long-term holders comfortably in the black for now.

“I don’t think… people who hold it as another currency… are changing their view,” said Morten Spenner, chief executive of $2.8 billion fund of funds firm International Asset Management (IAM).

“For some people who are long-term holders … and who have banged that drum, they’re likely to take it (the price fall),” Spenner said, adding that short-term market volatility that put pressure on the price of gold would not sway managers to abandon their positions.

Some big-name hedge fund managers have been successfully betting on the gold price this year, including John Paulson and Paul Tudor Jones.

Meanwhile, some managed futures funds — whose investment decisions are dictated by computer models — such as Man Group’s AHL and Winton Capital may have been hit by the fall in gold, although profits in other areas have offset the damage.

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