COT: Trade hopes cut demand for gold; Oil bought again. COT: Trade hopes cut demand for gold; Oil bought again. COT: Trade hopes cut demand for gold; Oil bought again.

COT: Trade hopes cut demand for gold; Oil bought again.

Ole Hansen

Head of Commodity Strategy

Summary:  COT on commodities in week to November 5 showed how trade hopes and weather developments drove position changes from oil and natural gas to gold and coffee

Saxo Bank publishes two 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.

The below summary highlights futures positions and changes made by hedge funds across 24 commodities futures up until last Tuesday, November 5. The reporting period covered a week where trade deal optimism continued to run high with stocks and bond yields both rising while the prospect for further U.S. rate cuts continued to deflate.

Just two months ago the appetite for key commodities among speculators, i.e. leveraged money managers or hedge funds, hit rock bottom. Back then the net-long across the 24 major futures tracked in this report dropped to a record low of just 38k lots. While the Bloomberg Commodity Index since then has only managed to recover by 2.2% the net-long has nevertheless jumped and last week it reached 587k lots, a 15-week high.

Conflicting news on tariffs roll back created a very volatile week for gold and silver. Ahead of Thursdays additional weakness the net longs in both had been cut primarily through increases in gross short positions. In gold the gross short jumped by 15% to 31k lots, a 22-week high. Both metals have been challenged by the recent rise in bond yields which have cut the total amount of negative yielding debt globally to $11.6 trillion, a one-third reduction since the August 28 peak. The improved outlook for has also led to a reduction in U.S. rate cut expectations. 

Despite its worst weekly decline since November 2016 gold has yet to break any major technical levels. Using retracement levels from the run up since May the levels we focus on are $1448/oz, $1413/oz and most importantly $1380/oz, the range top between 2014 and June this year. 

Continued copper buying reduced the net-short to 18k lots, the lowest since April 30. Another sign that the market is sensing a change in the outlook and with that reduced appetite from macro funds to hold short copper positions as a hedge against an economic slowdown. However having failed last week to break above the 200-day moving average at $2.7280/lb and with the speculative short much reduced the short-term outlook could now become more challenging.

Bets on rising energy prices rose by more than 100k lots in the week to November 5. Trade optimism and the prospect for further OPEC supply cuts supported a third weekly increase in WTI (+12k lots) and Brent (+28k lots) crude oil longs. During the past three weeks funds have bought 109k lots, still less than the 180k lots that was sold the previous three weeks.

A November chill across the eastern U.S. has helped lift natural gas prices and demand and as a result the net-short was halved last week.

Speculators cut short positions in Arabica coffee by 30% as the market tightens on concerns adverse weather in Brazil will lower yields. 

Hedge funds have due to the forward curve structure been holding a profitable net-short in coffee since 2017. The short periods of recovery during this time has mainly been driven by short-covering and whether this time is any different remains to be seen. Support has however started to emerge with the outlook for a rising supply deficit into the 2019-2020 season from a surplus the previous period. 

The cotton short more than doubled ahead of Friday’s price supportive WASDE report in which it delivered a bigger-than-expected cut to US and global supplies.

What is the Commitments of Traders report?

The Commitments of Traders (COT) report is issued by the US Commodity Futures Trading Commission (CFTC) every Friday at 15:30 EST with data from the week ending the previous Tuesday. The report breaks down the open interest across major futures markets from bonds, stock index, currencies and commodities. The ICE Futures Europe Exchange issues a similar report, also on Fridays, covering Brent crude oil and gas oil.

In commodities, the open interest is broken into the following categories: Producer/Merchant/Processor/User; Swap Dealers; Managed Money and other.

In financials the categories are Dealer/Intermediary; Asset Manager/Institutional; Managed Money and other.

Our focus is primarily on the behaviour of Managed Money traders such as commodity trading advisors (CTA), commodity pool operators (CPO), and unregistered funds.

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.


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. 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 Saxo News & Research 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 Saxo News & Research 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 Saxo News & Research or as a result of the use of the Saxo News & Research. 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. Saxo News & Research 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 our trading 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 Investment Research (
- Full disclaimer (

Saxo Markets
40 Bank Street, 26th floor
E14 5DA
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo Markets is a registered Trading Name of Saxo Capital Markets UK Ltd (‘SCML’). SCML is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo Markets assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992