Article / 18 September 2017 at 8:05 GMT

COT: Gold bought, oil sold in week to September 12 — #SaxoStrats

Head of Commodity Strategy / Saxo Bank
  • Gold investors add to elevated net-long in week to September 12
  • Net-long in gold reached 265,000 lots, the highest in a year
  • Oil could rally short-term on bullish IEA report, continued reduction in US rigs

Hedge funds
Hedge funds continued to move in to precious metals 
in the week to September 12. Photo: Shutterstock

By Ole Hansen

Hedge funds increased bullish bets across 24 US-traded commodity futures by 12% in the week to September 12. All sectors were net bought, not least agricultural commodities with nine out of 13 being bought. 

Against the prevailing market direction crude oil saw a surprise reduction while gold investors added to an already elevated net-long position. 

Speculative positioning in Commodities

Gold and silver were bought again despite the emerging softness as support from key drivers such as yields, stocks, and the Japanese yen began to fade. The net-long in gold reached 265,000 lots, the highest in a year and only 22,000 lots below the record from July 2016.

Silver meanwhile saw a 22% or 14,000 lots jump in the net-long to 75,000 lots. It has now retraced more than 75% of the April-to-July reduction that took it from a record long to a net-short. 

COT on metals
RBOB and NY Harbor ULSD continued to be bought as supply disruptions following Hurricane Harvey reduced stocks even further. Against the market's broad direction crude oil saw a surprise reduction of 7%, primarily due to long liquidation. 

On that basis crude oil has short-term potential to rally further as traders align positions to the upbeat outlook presented by the IEA last week together with the continued reduction in US oil rigs. 
COT on energy
Nine out of 13 agriculture commodities were bought, not least soybeans, sugar, and cotton. Hurricane Harvey and Irma concerns triggered a doubling of the cotton net-long in the three weeks up until last Tuesday. 

Soft commodities:
Soft commodities

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Source: Saxo Bank 

Grains and soybeans:
Grains and soybeans

— Edited by Michael McKenna

Ole Hansen is head of commodity strategy at Saxo Bank

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Commitments of Traders: Commodities


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