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COT: Buyers return to metals as dollar sags

Picture of Ole Hansen
Ole Hansen

Head of Commodity Strategy

Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex up until last Tuesday, May 24. A week where risk sentiment once again deteriorated on worries that aggressive moves to curb inflation might drive the US economy towards a recession. Bond yields and the dollar both traded lower in response to these developments, thereby inadvertently supporting the commodity sector where gains were led by energy as well as industrial and precious metals.

Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial.

This summary highlights futures positions and changes made by hedge funds across commodities and forex up until last Tuesday, May 24. A week where risk sentiment in the stock market deteriorated once again on worries that aggressive moves to curb inflation might tip the US economy into recession. This after recent economic data and corporate earnings pointed to a degree of macroeconomic deterioration. Bond yields and the dollar both traded lower in response to these developments which drove down the S&P 500 by 3.6% on the week. Thereby inadvertently supporting the commodity sector where gains were led by energy as well as the industrial and precious metal sectors.  

Latest across market updates, including crude oil and gold, can be found in our daily Financial Market Quick Take here


The Bloomberg Commodity Spot index traded a tad higher and not far below the April 18 record peak. Gains were led by precious and industrial metals, the energy sector took a breather while broad losses were seen across the agricultural sector led by corn, wheat, coffee and cotton. 

Speculators responded to these developments by adding length to a handful of commodities led by gold, brent crude, soybeans and sugar while a broad range saw reduction led by WTI crude oil, fuel oil products, corn, cocoa and livestock.


Energy: The energy was mixed with net buying of Brent, being partly offset by long liquidation in WTI crude oil. In addition, all three fuel products saw net selling as a pickup in refinery activity following maintenance triggered some price weakness and profit taking. Overall the combined crude oil net long rose for a second week to reach 473k lots, a three-month high.

Metals: Precious metals ended up being the best performing sectorduring the reporting week as lower bond yields and a weaker dollar supported a strong bounce in gold. The 2.5% rally supported a 42% increase in the net long position to 77.5k lots, still a much-depleted position compared with the March peak at 176k lots. Copper was bought for a second week as speculators continued to pair back short positions. Overall, a net short position of 11k lots has become a major tailwind for the bulls as the demand outlook in China improves as anti-virus measures are reduced.

Agriculture: The grain sector has now seen a net reduction in bullish bets in four out of the last five weeks. Selling was led by corn and wheat while the soybean complex was mixed. Since 2010 the total net long across the six major grain futures has only reached above 800,000 lots on four occasions, and based on the previous three, that milestone subsequently triggered a major market correction and position adjustments. Whether the same can happen at this juncture remains to be seen and will most likely depend on weather developments and whether a corridor can be arranged so that Ukraine can ship out stranded stocks of wheat and corn. 

Sharp price corrections in coffee and cotton supported long liquidations while the cocoa position flipped back to a net short for the first time in four months.



Speculators cut bullish dollar bets by 9% to $21 billion, a four-week low. Driven by a near doubling of the EURUSD long as speculators added length for a fourth consecutive week. During this time, they bought €5.7 billion, and so far, their search for a peak in the dollar has been successful with the EURUSD trading at a five-week high at €1.076 after finding support below €1.04. Flows among the other IMM currency futures were mixed with selling of GBP lifting the net short to 32-month high, CHF, AUD and NZD being partly offset by demand for JPY and CAD. 

What is the Commitments of Traders report?

The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class.

Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and other
Financials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and other
Forex: A broad breakdown between commercial and non-commercial (speculators)

The reasons why we focus primarily on the behavior of the highlighted groups are:

  • They are likely to have tight stops and no underlying exposure that is being hedged
  • This makes them most reactive to changes in fundamental or technical price developments
  • It provides views about major trends but also helps to decipher when a reversal is looming



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