COT: Oil sold, gold bought as trade uncertainty weighed

Ole Hansen

Head of Commodity Strategy, Saxo Bank Group

Summary:  In the week to November 19 speculators responded to continued trade deal uncertainty by cutting exposure in oil and copper while rebuilding longs in gold, silver and platinum. Soft commodities have seen a surge in demand recently with coffee, cocoa and not least sugar being bought.


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 key commodity futures up until last Tuesday, November 19. The report covered a week where the prospect for a “phase one” U.S.-China trade deal received a knock from the Senate vote on Hong Kong. While stocks climbed bonds saw 10-year yields tumble to 1.78% and the yield curve flattening.

Bullish bets across 24 major commodity futures tracked in this report held close to unchanged at 651,000 lots. Cyclical commodities led by oil and copper were sold while net-longs grow in gold, silver and platinum. The grain sector led by corn and soybeans continued to be sold while strong buying of soft commodities continued. Not least due to short-covering in sugar and a further rise in cocoa longs. 

Hedge funds responded to the latest trade developments by cutting bullish oil bets for the first time in five weeks. This before an end of week rally took both WTI and Brent crude oil to nine-week highs. The reduction was almost completely driven by a 19,593 lots cut in WTI bets while Brent held steady. 

The Natural gas short jumped by 74% as the market continued to digest and respond to alternating short-term weather forecasts

Gold, silver and platinum were all bought with the two semi industrial metals regaining some of the recently lost ground relative to gold. In gold the change was driven by a combination of fresh longs and short-covering after the yellow metal found support at $1448/oz, the 38.2% retracement of the June to September rally. 

Bearish copper bets meanwhile jumped by 56% to a four-week high as the metal challenged support at $2.61/lb.

Four weeks of continued selling in the three major crops of soybeans, corn and wheat helped drive the combined net-short to 107,000 lots, a seven week high. 

Speculators meanwhile boosted bullish cocoa bets to five-year high while bearish sugar and coffee bets both dropped to the a 19-week low.

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.

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