John J Hardy
Saxo Bank’s head of FX strategy John Hardy takes a closer look at trends and moves in today’s forex charts, including EURUSD, USDJPY, AUDUSD, and EURSEK.
Article / 12 February 2018 at 11:16 GMT

COT: Commodity risk reduced amid equity and bond turmoil – #SaxoStrats

Head of Commodity Strategy / Saxo Bank
  • Bullish bets on commodities almost unchanged in week to Feb. 6
  • Turmoil in stocks and bonds supported risk reduction in commodities
  •  Hedge funds scaled back long positions in energy and metals

oil and gas
 Hedge funds saw no reason to be long in energy while turmoil gripped equity markets. 
Pic: Shutterstock

By Ole Hansen

Hedge funds left bullish bets on commodities almost unchanged in the week to February 6. This was the day the Dow had its biggest points collapse on record. The unfolding market turmoil in stocks and bonds supported risk reduction in commodities during the week to February 6. Hedge funds scaled back long positions in energy and metals while covering short positions across the  agriculture sector.


Crude oil experienced a meltdown that it increasingly had been exposed to in recent months. The combination of a record long position, fading momentum, rising US production and stock market turmoil all helped trigger the worst week since 2016. By last Tuesday, however, the selloff had only just started and as result the combined net-long in Brent and WTI were only cut by 26.4k lots.

The products of RBOB, ULSD and gas oil all lost close to 10% last week as the record longs combined with rising US stocks and a deteriorating technical outlook had the contracts on the run.  

Gold, and not least silver, struggled amid the general loss of appetite for riskier assets, such as commodities. Hedge funds cut bullish gold bets by 11% following seven weeks of buying and after once again failing to establish support above $1350/oz. While finding support ahead of $1300/oz silver fared even worse and as of last Tuesday, 86% had taken the exposure back to neutral. 

Copper selling slowed in response to the metals ability to stay within its established range between $3 and £3.3/lb.

Adverse weather in both South America and the US Midwest combined with the need to cut exposure ensured another week dramatic short-covering across US crop futures.

gold, silver, etc

 – Edited by Clare MacCarthy


Ole Hansen is head of commodity strategy at Saxo Bank

carlosdemarch carlosdemarch
thanks Ole. I would appreciate if you can plot the commodity price in the graphs' right axis again.
Ole Hansen Ole Hansen
Let me take a look Carlos


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