Head of Commodity Strategy
Summary: Speculators were broad-based sellers of commodities last week as the uncertainty regarding the outlook for global growth and with that demand for commodities continued to take its toll
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.
To download your copy of the Commitment of Traders: Commodity report for the week ending June 18, click here.
Money managers, speculators or hedge funds as most tend to call them sold commodity futures during the week ending August 13. The net-long across 24 major futures, including the European based Brent and gas oil contracts, dropped by 27% to 313k lots, a four months low. While bonds have raced higher, commodities with gold and silver the two most noticeable exceptions, have all been struggling amid raised growth concerns and ample supply.
Gold’s phenomenal rally to a six-year high was tested last week following the US tariff announcement. The violent $55/oz retracement from $1535/oz was more an indication of how crowded the trade has become than a change in the fundamental outlook. Gold and not least silver were sold and in gold it triggered a small 2% reduction on the week to 278k lots, some 9k lots below the 2016 record.
Just like $1380/oz was the support following the July breakout the next support level to focus on now is the $1480-85/oz area with a break below signalling a period of consolidation but at this stage not a reversal.
The record copper short was reduced by 8% with speculators reducing short positions in response to the break and subsequent recovery back above key support. Platinum’s discount to gold widened further resulting in a 10% reduction in the net-long to just 7k lots.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
