COT: Gold speculators turn bullish ahead of FOMC; Oil long drops further

Commodities 4 minutes to read

Ole Hansen

Head of Commodity Strategy

Summary:  Hedge funds increased bullish commodity bets for a second week with precious metals and grains being the main contributors while crude oil and industrial metals were sold.


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: Commodities report for the week ending December 11, click here.


In crude oil, the relentless selling extending into an 11th week, albeit at a reduced pace. The combined net-long in Brent (+3.1k lots) and WTI (-8.6k lots) dropped to 256k lots, a three-year low. This occurred despite the Opec+ agreement to cut production over the coming months by 1.2 million barrels/day. The combined net-long – as per the chart below – is now more than 20% below the previous two lows in August 2016 and June 2017 from where crude oil rallied strongly on both occasions.

The gold position flipped to a net-long for the first time in five months. This came after funds cut longs by 8k lots and short positions by 20k lots. In the two weeks to November 11 funds bought 62k lots, mostly above $1,230/oz. While funds have moved towards a more bullish stance ahead of 2019 any additional dollar related weakness as seen on Friday could pose a short-term challenge.

Silver, meanwhile, had its net-short reduced to just 9k lots, as speculators turned the least bearish since July. 
 
Funds turned net-long in the grains sector after buying 71k lots, with the change being led by soybean oil (+13k) and corn (+45k). Speculators have not been net-long these three major crops in December since 2014. The cut-off time for this report occurred the day before soybeans temporarily spiked on news that China had resumed the purchase of US cargoes. 

In soft commodities funds added fresh Arabica coffee shorts as the bean suffered a sixth straight weekly decline, its longest losing streak since July. Signs of ample supply from Brazil and a weaker BRL supporting an elevated contango, which short-sellers attempts to benefit from.

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