Video

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 / 08 January 2018 at 8:42 GMT

COT: Metals bid, record oil long flat despite rally — #SaxoStrats

Head of Commodity Strategy / Saxo Bank
Denmark
  • Funds stock up on commodities in week to January 2
  • Metals see strong demand, gold and silver lead the pack
  • 'Price behavior of natural gas continues to frustrate traders'
Natural Gas
 Hopes for a winter rally in natural gas are fading. Photo: Shutterstock

By Ole Hansen

Hedge funds continued their broad-based buying of commodities into the new year. During the week ending January 2. Only five out of 26 futures tracked in this were sold with the metals sector, led by gold and silver, seeing particularly strong demand. 

The oil net-long reached a new record while natural gas buying surged as US temperatures slumped.

Speculative positioning in Commodities






















The metal sector, led by gold and silver, saw strong demand as the yellow metal continued its record-breaking run of consecutive gains. This comes in the wake of the December 13 rate hike and the US tax deal, which helped weaken the dollar while raising inflation concerns. 

Speculative positioning in COMEX Gold futures
 
For the second time within the last six months, funds only managed to hold onto a silver net-short for a couple of weeks. Last week’s buying of 23,000 lots was the biggest since May 2015. 

Speculative positioning in COMEX Silver futures


















The price behavior of natural gas continues to frustrate traders. Colder than normal weather across the US helped trigger a surge in the price which resulted in the net-long doubling up until last Tuesday. However, record production and signs that the cold may not last long enough to materially impact storage levels helped send the price sharply lower ahead of the weekend with funds once again reducing hopes of a winter rally. 

While the oil price moved higher in response to a potential Iranian supply threat funds only made a small addition of longs to an already bulging and record long of more than one million lots or one billion barrels.  
Speculative positioning in Crude oil
Funds boosted bullish bets in palladium to a fresh record of 27,000 lots as the ongoing momentum took the price to an all-time high amid signs of strong demand and tight supplies. The only worry right now is the extend of the position as it equates to more than five days of the average futures volume. 

Coffee and sugar are both threatening to break higher supported short-covering, particularly sugar which saw a 50% reduction. 

— Edited by Michael McKenna

Ole Hansen is head of commodity strategy at Saxo Bank

Download document

COT: Commodities in the week to January 2

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail