Article / 11 July 2016 at 7:49 GMT

COT: Gold, silver longs hitting new record

Head of Commodity Strategy / Saxo Bank


There was a big selloff of grain for a second week running. Photo: iStock

By Ole Hansen

Hedge funds were net-sellers of commodities for a second week with heavy selling of grains offsetting continuing demand for metals, both industrial through short covering and, not least, precious metals through the addition of new longs. 

Speculative positioning in Commodities
The combined net-long across the 22 commodities tracked in this dropped by 9% to a five-week low.

Hedge funds extended the record net-longs in gold and silver even further. Total gold investment through ETF's and futures hit 2,811 tonnes last Tuesday, up 232 tonnes in last four weeks.
Gold investments through futures and ETP
HG Copper turned net-long following three weeks of short-covering. Considering that this change was purely driven by short covering, the potential for further upside now remains limited unless fundamentals begin to improve.

Speculative positioning in HG Copper
WTI crude was sold for a second week with the net-long falling to a four-month low. The failure to break back above $50/barrel post Brexit, attracted renewed selling.  

On the product side, meanwhile, we are seeing the continued divergence between an oversupplied gasoline market and stronger demand for diesel. Funds are holding a near record-low exposure to gasoline while the net-long in NY Harbor ultra low sulphur diesel has risen to a two-year high.

Speculative positioning in products

Three weeks of heavy corn selling has triggered a 60% reduction in the net-long.
Speculative positioning in CBOT Corn
— Edited by Martin O'Rourke

Ole Hansen is head of commodities strategy at Saxo Bank
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Commitments of Traders: Commodities

Ole Hansen Ole Hansen
Bullish Brent crude oil bets reduced for a fourth consecutive week. In the week to July 5 hedge funds cut the Brent crude net-long by 4.5% to 312,270, a 4.5 month low. This the fourth consecutive weekly reduction was driven by incraeased short positioning
Ole Hansen Ole Hansen
The orderly reduction of bullish oil bets continue. The combined net-long down 27% to 484k lots from April 26 peak


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