Saxo News & Research by Ole Hansenhttp://www.home.saxo/insights/news-and-research/authors/ole-hansenSaxo News & Research by Ole HansenenSaxo Group 2018 ©Michael McKennaSaxo Grouphttp://www.home.saxo/insights/news-and-research/authors/ole-hansen60{BCEAE7EE-F6A0-4310-BC68-EB26B54BCF56}https://www.home.saxo/content/articles/commodities/crude-oil-maintains-support-amidst-array-of-bullish-signals-27032024Ole Hansenproduct-commoditiesInflationFederal Reservecommodity-crude oilcommodity-gas oilcommodity-heating oilOilsector-Oil and Gasplace-lc/cnCrude oil maintains support amidst array of bullish signals<div class="article-excerpt">Crude oil holds above key support, in WTI around USD 80 and USD 85 in Brent, with underlying fundamental support up against short-term risk of fund long liquidation</div><div class="article-rte"><div class="rte--output"><span></span> <div> <p><strong>Key points</strong></p> <ul> <li>Crude oil holds above key support, in WTI around USD 80 and USD 85 in Brent</li> <li>Ahead of EIAs weekly report, the API reported a bumper 9.3 million barrel crude stock build</li> <li>Underlying fundamental support up against short-term risk of fund long liquidation</li> </ul> <hr /> <p><span><span data-contrast="auto">Crude oil continues to be supported by geopolitical uncertainty amid Ukraine drone attacks on Russian oil infrastructure, extended OPEC+ production cuts including Russia's recent pledge to make extra cuts and signs of gasoline consumption strength. However, following the mid-March break higher the market has turned its attention to consolidation, leaving the market short-term exposed to long liquidation from technical-driven funds that bought the break above USD 80 in WTI and USD 85 in Brent.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></span></p> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="27olh_oil1" src="https://www.home.saxo/-/media/content-hub/images/2024/march/27olh_oil1.png"/></div><div class="rte--output">Source: Saxo </div><br/><div class="article-additional-rte"><div class="rte--output"><div> <div> <p paraid="846680481" paraeid="{2ac671a4-243a-4625-8342-535c933b6882}{141}"><span data-contrast="auto">Current headwinds apart from dollar strength and the current overhang of recently established long positions were last night's crude and fuel stock report from the American Petroleum Institute which showed a bumper 9.3 million barrel increase in crude stocks being only partly offset by lower gasoline stocks (see inserted table below).</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="768676240" paraeid="{2ac671a4-243a-4625-8342-535c933b6882}{147}"><span data-contrast="auto">While a build in crude and a drop in gasoline stocks are in line with the seasonal behaviour, the strength of the changes may still impact prices. I will post the results of the EIA report on X at </span><a href="https://twitter.com/Ole_S_Hansen" target="_blank" rel="noopener noreferrer"><span data-contrast="none">@ole_s_hansen</span></a><span data-contrast="auto"> once published at 13:30 GMT.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="2054133513" paraeid="{b5be354f-4193-44c0-a961-6b7548a8c1b5}{160}"><span data-contrast="auto"> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div></div></div><div class="article-image"><img alt="27olh_oil2" src="https://www.home.saxo/-/media/content-hub/images/2024/march/27olh_oil2.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <p paraid="1005059197" paraeid="{2ac671a4-243a-4625-8342-535c933b6882}{167}"><span data-contrast="auto">Money managers, like hedge funds and CTAs tend to anticipate, accelerate, and amplify price changes that have been set in motion by fundamentals. Since hitting an 11-year low last December at 170 million barrels, they have steadily been increasing their exposure in the WTI and Brent crude oil futures contracts, culminating in the week to March 19 when the net buying exceeded 100 million barrels (105k contracts), lifting the net long to a five-month high at 509 million barrels.<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="687551953" paraeid="{2ac671a4-243a-4625-8342-535c933b6882}{173}"><span data-contrast="auto">Being followers of trends and momentum these traders will buy into strength &ndash; and sell into weakness - and during the mentioned reporting week both WTI and Brent broke higher, thereby triggering the relatively aggressive buying response. Despite the multiple tailwinds mentioned above currently supporting the market, this behaviour highlights a market that could still run into technical selling should prices revert back below USD 80 in WTI and USD 85 in Brent.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div></div></div><div class="article-image"><img alt="27olh_oil3" src="https://www.home.saxo/-/media/content-hub/images/2024/march/27olh_oil3.png"/></div><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>26 Mch 2024: <a href="https://www.home.saxo/content/articles/commodities/golds-behavior-points-to-sustained-strong-demand-26032024">Gold's behaviour points to sustained demand</a><br /> 20 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/attacks-on-russian-refineries-lift-risk-premium-and-crude-prices-20032024"><strong><span>Attacks on Russian refineries lift risk premium and crude prices</span></strong></a></span><span><br /> 19 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/how-to-add-copper-exposure-to-your-portfolio-19032024"><strong><span>How to add copper exposure to your portfolio</span></strong></a></span><span><br /> 15 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---15-march-2024-15032024"><strong><span>Commodity weekly: Green shoots seen across key sectors</span></strong></a></span><span><br /> 13 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/lack-of-catalyst-pushes-crude-into-tightening-range-13032024"><strong><span>Lack of catalyst pushes crude into tightening range</span></strong></a></span><span><br /> 8 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---8-march-2024-08032024"><strong><span>Commodity weekly: Gold and silver steal the limelight</span></strong></a></span><span><br /> 8 Mch 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/options/investing-with-options---gold-optionality-08032024"><strong><span>Investing with options - Gold optionality</span></strong></a><span><br /> 6 Mch 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/how-to-add-gold-exposure-to-your-portfolio-06032024"><strong><span>How to add gold exposure to your portfolio</span></strong></a><span><br /> 6 Mch 2024:&nbsp;</span><a rel="noopener noreferrer" href="https://www.youtube.com/watch?v=ShVBip5DmL0" target="_blank"><strong><span>Video: What happened to the gold prices?</span></strong></a><span><br /> 1 Mch 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-march-2024-01032024"><strong><span>Grains dip, cocoa soars, gold and oil see rays of strength: February&rsquo;s commodity mix</span></strong></a><span><br /> 29 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-29-feb-2024---commodities---why-speculative-interest-is-important-for-everyone-29022024"><strong><span>Podcast: Why speculative interest is important to understand</span></strong></a><span><br /> 28 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/oil-price-stuck-in-neutral-despite-underlying-strength-28022024"><strong><span>Oil price stuck in neutral despite underlying strength</span></strong></a><span><br /> 27 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/resilient-gold-market-defies-lower-rate-cut-predictions-27022024"><strong><span>Resilient gold market defies lower rate cut predictions</span></strong></a><span><br /> 22 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/copper-short-squeeze-fades-ahead-of-key-resistance-22022024"><strong><span>Copper short squeeze fades ahead of key resistance</span></strong></a><span><br /> 21 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/golds-resilience-despite-recent-etf-and-futures-selling-21022024"><strong><span>Gold's resilience despite recent futures and ETF selling</span></strong></a><span><br /> 20 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024"><strong><span>WTI crude eyes resistance amid improved signals</span></strong></a><span><br /> 16 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024"><strong><span>Commodity weekly: Grains tumble; Industrial metals eye China boost</span></strong></a><span><br /> 15 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024"><strong><span>US rate cut delay drives gold below $2000</span></strong></a><span><br /> 13 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a><span><br /> 9 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a><span><br /> 9 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a><span><br /> 7 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a><span><br /> 6 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a><span><br /> 2 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a><span><br /> 1 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a><span><br /> <strong><br /> <strong><span>Previous "Commitment of Traders" articles</span></strong></strong></span></p> <p><strong><span>25 Mch 2024:&nbsp;</span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---25-march-2024-25032024"><strong><span>COT: Hedge funds zoom in on crude, copper and silver</span></strong></a><strong><span><br /> <strong><span>18 Mch 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-march-2024-18032024"><strong><span>COT: Hedge funds buying expands from precious metals to copper and grains</span></strong></a><strong><span><br /> <strong><span>11 Mch 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-march-2024-11032024"><strong><span>COT: Specs rush back into gold, elevated yen short in focus</span></strong></a><strong><span><br /> <strong><span>4 Mch 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---4-march-2024-04032024"><strong><span>COT: Underinvested speculators fuel gold's latest surge</span></strong></a><strong><span><br /> <strong><span>26 Feb 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---26-feb-2024-26022024"><strong><span>COT:&nbsp;Record corn short, cocoa surge no longer supported by speculators</span></strong></a><strong><span><br /> <strong><span>19 Feb 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024"><strong><span>COT: US inflation surprise drives broad selling of metals</span></strong></a><strong><span><br /> <strong><span>5 Feb 2024:</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Inflation</span> <span>Federal Reserve</span> <span>Crude Oil</span> <span>Gas Oil</span> <span>Heating Oil</span> <span>Oil</span> <span>Oil and Gas</span> <span>China</span></div>Wed, 27 Mar 2024 10:30:00 Z2024-03-27T10:51:25Z{497EE447-5252-4724-9AED-0843CEEC119D}https://www.home.saxo/content/articles/commodities/golds-behavior-points-to-sustained-strong-demand-26032024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal ReserveMiningFocus InflationWeekly NewsletterGold’s behaviour points to sustained strong demand<div class="article-excerpt">Traders maintain a buy-on-dip approach to gold and recently also silver</div><div class="article-rte"><div class="rte--output"><div> <h3 paraid="525968663" paraeid="{3b8eadfd-9d4f-424c-8879-aef65fc50888}{38}" class="article-heading--3">Summary</h3> <div> <ul role="list"> <li data-leveltext="" data-font="Symbol" data-list-defn-props="{'335552541':1,'335559683':0,'335559684':-2,'335559685':720,'335559991':360,'469769226':'Symbol','469769242':[8226],'469777803':'left','469777804':'','469777815':'hybridMultilevel'}" aria-setsize="-1" data-aria-posinset="1" data-aria-level="1" role="listitem"> <p paraid="895313213" paraeid="{be4d48e0-bef4-4af9-8a6b-fa32d86ba117}{234}"><span data-contrast="none">Gold remains a buy-on-dip market, defying the normal negative impact of dollar and yield strength</span></p> </li> <li data-leveltext="" data-font="Symbol" data-list-defn-props="{'335552541':1,'335559683':0,'335559684':-2,'335559685':720,'335559991':360,'469769226':'Symbol','469769242':[8226],'469777803':'left','469777804':'','469777815':'hybridMultilevel'}" aria-setsize="-1" data-aria-posinset="1" data-aria-level="1" role="listitem"> <p paraid="895313213" paraeid="{be4d48e0-bef4-4af9-8a6b-fa32d86ba117}{234}"><span data-contrast="none"></span><span >Rallies that happen for no apparent reason - like today - should be respected</span></p> </li> <li data-leveltext="" data-font="Symbol" data-list-defn-props="{'335552541':1,'335559683':0,'335559684':-2,'335559685':720,'335559991':360,'469769226':'Symbol','469769242':[8226],'469777803':'left','469777804':'','469777815':'hybridMultilevel'}" aria-setsize="-1" data-aria-posinset="1" data-aria-level="1" role="listitem"> <p paraid="895313213" paraeid="{be4d48e0-bef4-4af9-8a6b-fa32d86ba117}{234}"><span ></span><span >Supported by industrial metals, silver heads for a strong month despite a failed breakout attempt</span><span >&nbsp;</span></p> </li> </ul> </div> <hr /> <p paraid="1127459217" paraeid="{b6846a18-fee3-48bb-bd58-5b8b58c874ad}{124}"><span data-contrast="auto">Gold&rsquo;s strong March rally culminated last week when the yellow metal briefly surged to a fresh record high at USD 2,221 per ounce, after the FOMC stuck to their three rate cut projections for this year, only to suffer another mild round of profit taking as the dollar continued higher. Overall, gold is heading for a March gain around 7% while silver has managed a near 10% rally, both after suffering mild setbacks during January and February when the dollar and US Treasury yields rose in response to traders adjusting inflation expectations higher, and rate cut projections lower.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <p><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <div> <div> <h3><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="26olh_gld1" src="https://www.home.saxo/-/media/content-hub/images/2024/march/26olh_gld1.png"/></div><div class="article-additional-rte"><div class="rte--output"><span data-contrast="auto"><a href="https://www.saxotrader.com/sim/instant-demo/InstantDemo-EN-GL/page/product/FxSpot/8177?activeTab=overview&amp;cmpid=copy_link_platform_sharing"></a></span> <div> <div> <p paraid="2124117258" paraeid="{90d0dbe7-0662-4134-9b51-85ac01fddbd4}{82}"><span data-contrast="auto">Overall, gold continues to defy the normal negative impact of dollar and yield strength, both of which have risen this year, instead the metal has been supported by safe demand related to several geopolitical risks around the world, and not least continued strong underlying support from central banks and retail buyers of physical gold and jewellery especially from India and China. In addition, the early March break above USD 2,088 per ounce helped trigger a very aggressive buying response from technical and momentum driven hedge funds. During a two-week period to March 12, <a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---25-march-2024-25032024">managed money</a>&nbsp;accounts bought 9.2 million ounces or 285 tons, an amount it took ETF investors more than seven months to sell. To put it into further perspective, central banks have in each of the past two years bought more than 1,000 tons, again highlighting the aggressive nature of the recent fund buying.<span data-contrast="auto"> </span></span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <h3 paraid="1033937941" paraeid="{40b2c94f-ca78-4b98-88a6-b55cc697fffa}{234}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <div> <p paraid="1425391661" paraeid="{7ae875e5-8831-4f3d-9c4d-e0eec23f9053}{112}"><span data-ccp-props="{'134233117':false,'134233118':false,'335559738':0,'335559739':0}"></span></p> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></div></div><div class="article-image"><img alt="26olh_gld2" src="https://www.home.saxo/-/media/content-hub/images/2024/march/26olh_gld2.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <p paraid="1037046065" paraeid="{b6846a18-fee3-48bb-bd58-5b8b58c874ad}{150}"><span data-contrast="auto">Do note that this group of traders tends to anticipate, accelerate, and amplify price changes that have been set in motion by fundamentals. Being followers of momentum, this strategy often sees this group of traders buy into strength and sell into weakness. They are likely to have tight stops and no underlying exposure that is being hedged, and this makes them most reactive to changes in the fundamental or technical developments. In the short term, gold needs to hold key support levels in order to avoid a fresh round of profit taking, but so far the corrections seen have been shallow enough to prevent temporary price weakness through long liquidation.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1832215491" paraeid="{b6846a18-fee3-48bb-bd58-5b8b58c874ad}{156}"><span data-contrast="auto">After hitting a fresh record high last week, gold suffered another mild round of consolidation, however without challenging support at USD 2,146 followed by USD 2,132. Moves that happen for no apparent reasons are often ones that deserve some respect, and today&rsquo;s rally back towards USD 2,200 is one of them, happening without any notably support from other markets, highlighting a continued strong buying on dip mentality in the market. We maintain our 2024 forecast for gold to reach USD 2,300, and silver USD 28, with the technical picture pointing even higher towards USD 2,500.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div></div></div><div class="article-image"><img alt="26olh_gld3" src="https://www.home.saxo/-/media/content-hub/images/2024/march/26olh_gld3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><div> <p paraid="717639469" paraeid="{b6846a18-fee3-48bb-bd58-5b8b58c874ad}{177}"><span data-contrast="auto">Silver, meanwhile, has for a while been struggling relative to gold, not least because the white metal has not enjoyed the mentioned support from central banks. During the past month, however, the semi-precious metal which derives around half of its demand from industrial applications has received a boost from a recovering industrial metal sector, not least copper which recently reached an 11-month high, supported by a tightening mined supply outlook and Chinese smelters discussing production curbs.&nbsp;<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="694473117" paraeid="{b6846a18-fee3-48bb-bd58-5b8b58c874ad}{183}"><span data-contrast="auto">The improved outlook temporarily drove the gold-silver ratio down to a new year-to-date low around 85 ounces of silver to one ounce of gold, before reverting higher to the current 88.40. While gold has made several fresh record highs this past month, silver has yet to clear a key area of resistance between USD 25.75 and USD 26.15 per ounce, with the latest setback back towards support around USD 24.44 per ounce being driven by funds reducing bullish bets following the strongest three-week accumulation in almost five years</span></p> </div></div></div><div class="article-image"><img alt="26olh_gld4" src="https://www.home.saxo/-/media/content-hub/images/2024/march/26olh_gld4.png"/></div><div class="rte--output">Source: Saxo </div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <strong></strong> <p><span><strong>Commodities related articles</strong><br /> <br /> 20 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/attacks-on-russian-refineries-lift-risk-premium-and-crude-prices-20032024"><strong><span>Attacks on Russian refineries lift risk premium and crude prices</span></strong></a></span><span><br /> 19 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/how-to-add-copper-exposure-to-your-portfolio-19032024"><strong><span>How to add copper exposure to your portfolio</span></strong></a></span><span><br /> 15 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---15-march-2024-15032024"><strong><span>Commodity weekly: Green shoots seen across key sectors</span></strong></a></span><span><br /> 13 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/lack-of-catalyst-pushes-crude-into-tightening-range-13032024"><strong><span>Lack of catalyst pushes crude into tightening range</span></strong></a></span><span><br /> 8 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---8-march-2024-08032024"><strong><span>Commodity weekly: Gold and silver steal the limelight</span></strong></a></span><span><br /> 8 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/options/investing-with-options---gold-optionality-08032024"><strong><span>Investing with options - Gold optionality</span></strong></a></span><span><br /> 6 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/how-to-add-gold-exposure-to-your-portfolio-06032024"><strong><span>How to add gold exposure to your portfolio</span></strong></a></span><span><br /> 6 Mch 2024:&nbsp;</span><span><a rel="noopener noreferrer" href="https://www.youtube.com/watch?v=ShVBip5DmL0" target="_blank"><strong><span>Video: What happened to the gold prices?</span></strong></a></span><span><br /> 1 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-march-2024-01032024"><strong><span>Grains dip, cocoa soars, gold and oil see rays of strength: February&rsquo;s commodity mix</span></strong></a></span><span><br /> 29 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-29-feb-2024---commodities---why-speculative-interest-is-important-for-everyone-29022024"><strong><span>Podcast: Why speculative interest is important to understand</span></strong></a></span><span><br /> 28 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/oil-price-stuck-in-neutral-despite-underlying-strength-28022024"><strong><span>Oil price stuck in neutral despite underlying strength</span></strong></a></span><span><br /> 27 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/resilient-gold-market-defies-lower-rate-cut-predictions-27022024"><strong><span>Resilient gold market defies lower rate cut predictions</span></strong></a></span><span><br /> 22 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/copper-short-squeeze-fades-ahead-of-key-resistance-22022024"><strong><span>Copper short squeeze fades ahead of key resistance</span></strong></a></span><span><br /> 21 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/golds-resilience-despite-recent-etf-and-futures-selling-21022024"><strong><span>Gold's resilience despite recent futures and ETF selling</span></strong></a></span><span><br /> 20 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024"><strong><span>WTI crude eyes resistance amid improved signals</span></strong></a></span><span><br /> 16 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024"><strong><span>Commodity weekly: Grains tumble; Industrial metals eye China boost</span></strong></a></span><span><br /> 15 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024"><strong><span>US rate cut delay drives gold below $2000</span></strong></a></span><span><br /> 13 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a></span><span><br /> 7 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a></span><span><br /> 6 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a></span><span><br /> 2 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a></span><span><br /> 1 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a></span><span><br /> <strong><br /> <strong><span>Previous "Commitment of Traders" articles</span></strong></strong></span></p> <p><strong><span>25 Mch 2024: <a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---25-march-2024-25032024">COT: Hedge funds zoom in on crude, copper and silver</a><br /> 18 Mch 2024:&nbsp;</span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-march-2024-18032024"><strong><span>COT: Hedge funds buying expands from precious metals to copper and grains</span></strong></a><strong><span><br /> <strong><span>11 Mch 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-march-2024-11032024"><strong><span>COT: Specs rush back into gold, elevated yen short in focus</span></strong></a><strong><span><br /> <strong><span>4 Mch 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---4-march-2024-04032024"><strong><span>COT: Underinvested speculators fuel gold's latest surge</span></strong></a><strong><span><br /> <strong><span>26 Feb 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---26-feb-2024-26022024"><strong><span>COT:&nbsp;Record corn short, cocoa surge no longer supported by speculators</span></strong></a><strong><span><br /> <strong><span>19 Feb 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024"><strong><span>COT: US inflation surprise drives broad selling of metals</span></strong></a><strong><span><br /> <strong><span>5 Feb 2024:</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Mining</span> <span>Focus Inflation</span> <span>Weekly Newsletter</span></div>Tue, 26 Mar 2024 10:30:00 Z2024-03-27T10:51:45Z{09E4D76B-C03A-4A75-A94E-A9A8558917F3}https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---25-march-2024-25032024Ole Hansenproduct-commoditiesCOT Commoditiescommodity-crude oilcommodity-natural gascommodity-goldcommodity-silvercommodity-coppercommodity-platinumcommodity-corncommodity-sugarcommodity-coffeecommodity-gasolinecommodity-palladiumcommodity-wheatcommodity-cocoacommodity-cottoncommodity-cattlesector-gics-1010product-forexCOT FXforex-eurusdforex-usdjpyforex-audusdforex-usdcadforex-usdchfforex-gbpusdforex-nzdusdsubject-is/fin.stpbondBonds Inspirationproduct-bondsproduct-forexEn hurtig tankeCOT: Hedge funds zoom in on crude, copper, and silver<div class="article-excerpt">Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to last Tuesday, 19 March.</div><div class="article-rte"><div class="rte--output"><h3></h3> <h3 class="article-heading--3">Summary</h3> <ul> <li class="text--body">Notable hedge funds buying of crude, copper and silver left all three vulnerable to end of week dollar strength</li> <li class="text--body">Gold buying paused ahead of FOMC with attention instead turning to silver</li> <li class="text--body">Grain buying extended to a second week; funds sold into continued cocoa surge</li> <li class="text--body">A seven-fold increase in the dollar long against seven IMM forex futures</li> </ul> <hr /> <h3 class="article-heading--3">Forex:&nbsp;</h3> <p><span>In the forex market, broad dollar strength continued ahead of Wednesday&rsquo;s FOMC meeting resulting in a seven-fold increase in the gross dollar long against eight IMM forex futures to USD 7.9 billion. Except the Mexican peso which saw its net long jump to a four-year high supported by a rising carry, the bulk of the dollar buying was driven by a 35% reduction in the EUR long to an October 2022 low at 48.3k contacts. In addition, Bank of Japan&rsquo;s dovish hike helped trigger fresh short selling of the yen, the AUD net short reached a record high at 107.5k contracts (USD 7 bn equivalent) while the CHF short reached a 28-month high at 20.5k contracts. </span></p></div></div><div class="article-image"><img alt="25olh_cot1" src="https://www.home.saxo/-/media/content-hub/images/2024/march/25olh_cot1.png"/></div><div class="rte--output">Non-commercial long, short and net positions across key IMM currency futures</div><br/><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3">Commodities</h3> <p><span>The Bloomberg Commodity index, which tracks a basket of 24 major futures markets split between energy (30.1%), metals (34.2%) and agriculture (35.7%), traded higher for a third week, but while recent gains had been driven by broad sector strength, the gains seen during the latest reporting week were concentrated in energy and a few other commodities, most notably silver, copper, cocoa and coffee. <br /> <br /> On an individual level, three commodities; crude oil, silver and copper stood out with buying of the three amounting to a nominal value of USD 13.4 billion, on an individual level lifting the net long of all three to one-year highs. With such an inflow of fresh longs these three markets were left vulnerable to the end of week correction that was triggered by a sharply stronger dollar, not least against the Chinese renminbi. </span></p></div></div><div class="article-image"><img alt="25olh_cot2" src="https://www.home.saxo/-/media/content-hub/images/2024/march/25olh_cot2.png"/></div><div class="rte--output">Managed money long, short and net positions in the week to March 19.</div><br/><div class="article-image"><img alt="25olh_cot3" src="https://www.home.saxo/-/media/content-hub/images/2024/march/25olh_cot3.png"/></div><div class="rte--output">Energy: Strong week for the sector led by 7% gains in crude oil, lifting the Brent and WTI combined net long to a five-month high at 509k contracts. Russian fuel supply concerns lifted the gas oil (diesel) long by 42% while higher natural gas reduced the short by 20%</div><br/><div class="article-image"><img alt="25olh_cot4" src="https://www.home.saxo/-/media/content-hub/images/2024/march/25olh_cot4.png"/></div><div class="rte--output">Metals: Funds turned small net sellers of gold following a two-week rush that saw the net long jump 91.5k contracts to a two-year high. Instead, silver buying picked up pace, driving the net long to an April 2022 high. Copper’s temporary upside break lifted the net long to a 14-month high, leaving it exposed to end of week profit taking as the dollar strengthened </div><br/><div class="article-image"><img alt="25olh_cot5a" src="https://www.home.saxo/-/media/content-hub/images/2024/march/25olh_cot5a.png"/></div><div class="rte--output">Grains: short covering extended to a second week led by the soy complex and corn </div><br/><div class="article-image"><img alt="25olh_cot6" src="https://www.home.saxo/-/media/content-hub/images/2024/march/25olh_cot6.png"/></div><div class="rte--output">Softs: funds continued to sell into surging cocoa prices, reducing the net long to a one-year low, and with coffee and cocoa also sold the sector suffered an overall 5% reduction in the combined net long.</div><br/><div class="article-additional-rte"><div class="rte--output"><h3>What is the Commitments of Traders report?</h3> <p>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.</p> <p><span>Commodities</span>: Producer/Merchant/Processor/User, Swap dealers,&nbsp;Managed Money&nbsp;and other<br /> <span>Financials</span>: Dealer/Intermediary; Asset Manager/Institutional;&nbsp;Leveraged Funds&nbsp;and other<br /> <span>Forex</span>: A broad breakdown between commercial and&nbsp;non-commercial&nbsp;(speculators)</p> <p>The main reasons why we focus primarily on the behavior of speculators, such as hedge funds and trend-following CTA's are:</p> <ul> <li>They are likely to have&nbsp;tight stops&nbsp;and&nbsp;no underlying exposure&nbsp;that is being hedged</li> <li>This makes them&nbsp;most reactive to changes&nbsp;in fundamental or technical price developments</li> <li>It provides views about&nbsp;major trends&nbsp;but also helps to decipher when a&nbsp;reversal&nbsp;is looming</li> </ul> <p>Do note that&nbsp;this group tends to&nbsp;<span>anticipate</span>,<span>&nbsp;accelerate</span>, and&nbsp;<span>amplify</span>&nbsp;price changes that have been set in motion by&nbsp;fundamentals. Being followers of momentum, this strategy often sees this group of traders buy into strength and sell into weakness, meaning that they are often found holding the biggest long near the peak of a cycle or the biggest short position ahead of a through in the market.</p></div></div><div class="article-additional-rte"><div class="rte--output"><hr /> <p><span>20 Mch 2024:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/attacks-on-russian-refineries-lift-risk-premium-and-crude-prices-20032024">Attacks on Russian refineries lift risk premium and crude prices</a><br /> 19 Mch 2024:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/how-to-add-copper-exposure-to-your-portfolio-19032024">How to add copper exposure to your portfolio</a><br /> 15 Mch 2024: <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---15-march-2024-15032024">Commodity weekly: Green shoots seen across key sectors</a><br /> 13 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/lack-of-catalyst-pushes-crude-into-tightening-range-13032024"><strong><span>Lack of catalyst pushes crude into tightening range</span></strong></a></span><span><br /> 8 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---8-march-2024-08032024"><strong><span>Commodity weekly: Gold and silver steal the limelight</span></strong></a></span><span><br /> 8 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/options/investing-with-options---gold-optionality-08032024"><strong><span>Investing with options - Gold optionality</span></strong></a></span><span><br /> 6 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/how-to-add-gold-exposure-to-your-portfolio-06032024"><strong><span>How to add gold exposure to your portfolio</span></strong></a></span><span><br /> 6 Mch 2024:&nbsp;</span><span><a rel="noopener noreferrer" href="https://www.youtube.com/watch?v=ShVBip5DmL0" target="_blank"><strong><span>Video: What happened to the gold prices?</span></strong></a></span><span><br /> 1 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-march-2024-01032024"><strong><span>Grains dip, cocoa soars, gold and oil see rays of strength: February&rsquo;s commodity mix</span></strong></a></span><span><br /> 29 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-29-feb-2024---commodities---why-speculative-interest-is-important-for-everyone-29022024"><strong><span>Podcast: Why speculative interest is important to understand</span></strong></a></span><span><br /> 28 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/oil-price-stuck-in-neutral-despite-underlying-strength-28022024"><strong><span>Oil price stuck in neutral despite underlying strength</span></strong></a></span><span><br /> 27 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/resilient-gold-market-defies-lower-rate-cut-predictions-27022024"><strong><span>Resilient gold market defies lower rate cut predictions</span></strong></a></span><span><br /> 22 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/copper-short-squeeze-fades-ahead-of-key-resistance-22022024"><strong><span>Copper short squeeze fades ahead of key resistance</span></strong></a></span><span><br /> 21 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/golds-resilience-despite-recent-etf-and-futures-selling-21022024"><strong><span>Gold's resilience despite recent futures and ETF selling</span></strong></a></span><span><br /> 20 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024"><strong><span>WTI crude eyes resistance amid improved signals</span></strong></a></span><span><br /> 16 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024"><strong><span>Commodity weekly: Grains tumble; Industrial metals eye China boost</span></strong></a></span><span><br /> 15 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024"><strong><span>US rate cut delay drives gold below $2000</span></strong></a></span><span><br /> 13 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a></span><span><br /> 7 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a></span><span><br /> 6 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a></span><span><br /> 2 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a></span><span><br /> 1 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a></span><span><br /> <strong><br /> <strong><span>Previous "Commitment of Traders" articles</span></strong></strong></span></p> <p><strong><span>18 Mch 2024:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-march-2024-18032024">COT: Hedge funds buying expands from precious metals to copper and grains</a><br /> 11 Mch 2024:&nbsp;</span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-march-2024-11032024"><strong><span>COT: Specs rush back into gold, elevated yen short in focus</span></strong></a><strong><span><br /> <strong><span>4 Mch 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---4-march-2024-04032024"><strong><span>COT: Underinvested speculators fuel gold's latest surge</span></strong></a><strong><span><br /> <strong><span>26 Feb 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---26-feb-2024-26022024"><strong><span>COT:&nbsp;Record corn short, cocoa surge no longer supported by speculators</span></strong></a><strong><span><br /> <strong><span>19 Feb 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024"><strong><span>COT: US inflation surprise drives broad selling of metals</span></strong></a><strong><span><br /> <strong><span>5 Feb 2024:</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><strong><span><br /> <br /> </span></strong></p> <p><strong><span></span></strong><span><br /> </span></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>COT Commodities</span> <span>Crude Oil</span> <span>Natural Gas</span> <span>Gold</span> <span>Silver</span> <span>Copper</span> <span>Platinum</span> <span>Corn</span> <span>Sugar</span> <span>Coffee</span> <span>Gasoline</span> <span>Palladium</span> <span>Wheat</span> <span>Cocoa</span> <span>Cotton</span> <span>Cattle</span> <span>Energy (Sector)</span> <span>Forex</span> <span>COT FX</span> <span>EURUSD</span> <span>USDJPY</span> <span>AUDUSD</span> <span>USDCAD</span> <span>USDCHF</span> <span>GBPUSD</span> <span>NZDUSD</span> <span>Government Bonds</span> <span>Bonds nspiration</span> <a href="https://www.home.saxo/insights/news-and-research/bonds">Bonds</a> <a href="https://www.home.saxo/insights/news-and-research/forex">Forex</a> <span>En hurtig tanke</span></div>Mon, 25 Mar 2024 10:30:00 Z2024-03-27T10:51:48Z{E9B1494E-8503-463D-AE15-F9B16ACA6619}https://www.home.saxo/content/articles/commodities/gold-is-ready-to-rise-21032024Ole Hansenproduct-commoditiesHighlighted articlescommodity-goldGold is ready to rise<div class="article-excerpt">Will 2024 be the year of the metals? Gold has just reached a fresh record high driven by strong retail demand and record central bank buying. With the prospect for rate cuts in the US later this year, further strength could lie ahead.</div><div class="article-rte"><div class="rte--output"><h3>How to invest/trade gold:</h3> <p><span><strong>Physical gold</strong></span><strong>:</strong> Purchasing physical gold in the form of jewellery, coins, or bars provides direct exposure to the metal but involves considerations such as secure storage, insurance, and higher trading costs.</p> <p><span><strong>Gold ETFs/ETCs</strong></span>: Exchange-traded funds or commodities offer a convenient way to invest in gold without holding physical metal. These products track gold prices closely and can be traded easily on exchanges.<br /> <br /> <span><strong>Gold mining stocks/ETFs:&nbsp;</strong></span>Investing in gold mining companies or ETFs that hold a basket of mining stocks provides exposure to gold prices. However, these investments carry operational risks and may exhibit higher volatility compared to gold itself.&nbsp;<span>Since 2022, when the US Federal Reserve began hiking rates to curb soaring inflation, gold miners have struggled relative to the price of gold amid rising costs towards financing, labour, and materials. The weakness seen during the past few months has left the sector increasingly undervalued relative to the gold prices hitting fresh record closing highs.</span><span >&nbsp;</span></p> <h3>Which factors drive gold?</h3> <p><span><strong>Monetary policy</strong></span><strong>:</strong> The policies of the US Federal Reserve, including interest rates and inflation targets, significantly influence gold prices. As gold does not yield interest, rising interest rates increase the opportunity cost of holding gold, often leading asset managers to reduce their exposure to real assets.</p> <p><span><strong>Currency fluctuations</strong></span><strong>: </strong>Gold prices typically exhibit an inverse relationship with the value of the US dollar. A weaker dollar tends to drive gold prices higher, and conversely, a stronger dollar can suppress gold prices.</p> <p><span><strong>Real bond yields</strong></span><strong>: </strong>Gold prices often move inversely to interest rates, as rising rates increase the opportunity cost of holding non-interest-bearing assets like gold. Long-term investors monitor developments in US real yields, which represent the yield on a bond investment adjusted for expected inflation.</p> <p><span><strong>Central bank demand</strong></span><strong>:</strong> Several central banks have been acquiring gold in recent years to diversify their reserves away from heavy reliance on the dollar. Additionally, gold's lack of credit or counterpart risk makes it a trusted reserve asset globally.</p> <p><span><strong>Geopolitical tensions</strong></span><strong>: </strong>Gold is considered a safe-haven asset, sought by investors during times of geopolitical uncertainty or crisis due to its intrinsic value and perceived stability.</p> <p><span><strong>Speculative activity</strong></span><strong>: </strong>Hedge funds and speculators often anticipate and amplify price movements in gold markets based on fundamental and momentum-driven factors.</p></div></div><div class="article-video"><iframe title="" src="//saxobank.23video.com/13846859.ihtml/player.html?source=embed&photo_id=95589257"></iframe></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Highlighted articles</span> <span>Gold</span></div>Thu, 21 Mar 2024 11:41:00 Z2024-03-21T12:51:45Z{B4917683-AE5E-4EB3-88B9-592337063968}https://www.home.saxo/content/articles/commodities/attacks-on-russian-refineries-lift-risk-premium-and-crude-prices-20032024Ole Hansenproduct-commoditiesInflationFederal Reservecommodity-crude oilcommodity-gas oilcommodity-heating oilOilsector-Oil and Gasplace-lc/cnAttacks on Russian refineries lift risk premium and crude prices<div class="article-excerpt">Crude oil’s steady ascent since December shows sign of running out of steam.</div><div class="article-rte"><div class="rte--output"><span></span> <div> <ul> <li>Crude oil breaks long-held range on supply disruptions and export curbs</li> <li>Focus on FOMC outcome and EIA's weekly crude and fuel stock report</li> <li><span>The triangle breakout suggests a 5-8% upside for crude oil</span></li> </ul> <hr /> <p><span>In last week's crude update, we highlighted how the recent lack of a price catalyst had pushed the four-week rolling average trading range in WTI and Brent to a ten-year low. Crude has nevertheless been seeing a steady but calm ascent since December, when Houthi attacks on ships in the Red Sea raised the geopolitical temperature while supporting tighter market conditions with millions of barrels of crude and fuel products being stuck at sea for longer.</span></p> <p><span>However, since then the combination of continued Ukrainian drone strikes on Russian refineries, lifting gasoline and diesel prices, and Iraqi plans to reduce oil exports in the coming months to compensate for recent overproduction relative to OPEC+ limits, helped drive WTI and Brent higher in the process supporting fresh momentum buying from funds looking for an extension of the long-held range. Also supporting prices were the latest <a href="https://www.iea.org/reports/oil-market-report-march-2024">Oil Market Report</a> from the International Energy Agency (IEA) in which they raised their global oil demand forecast to 1.3 million barrels per day, while shifting their balance for the year from a surplus to a deficit based on the assumption OPEC+ will maintain current production curbs through 2024.</span></p> <p><span>The biggest driver supporting the latest buying has undoubtedly been an actual supply disruption in Russia after several recent drone attacks on oil refineries added upward pressure to fuel markets, driving up crude demand, with JP Morgan estimating that 900,000 barrels per day of Russian refinery capacity being offline. A development that, depending on the duration, may support a more sticky risk premium, than those that were added following the December attacks in the Red Sea.</span></p> <p><span>Crude prices have softened a bit today ahead of the FOMC meeting that may shape the broader market tone through its impact on rates, bond yields and not least the dollar which trades higher for a fifth day, primarily driven by yen weakness following a historic rate hike from the Bank of Japan that ended up leaving more questions than answers. Ahead of the announcement, the EIA will publish its weekly crude and fuel stock report, with surveys and yesterday's American Petroleum Institute report pointing to a draw in crude and gasoline stocks. I will post the results of the EIA report on X at <a href="https://twitter.com/Ole_S_Hansen">@ole_s_hansen</a> once published at 13:30 GMT.</span></p> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="20olh_oil1" src="https://www.home.saxo/-/media/content-hub/images/2024/march/20olh_oil1.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <div> <p><span>According to Kim Cramer, our technical analyst, <a href="https://www.home.saxo/content/articles/commodities/technical-analysis-crude-oil-broken-bullish-eyeing-higher-levels-19032024">the triangle breakout</a>&nbsp;suggests a 5-8% upside for crude oil, with Brent potentially targeting USD 90-93 per barrel and WTI USD 87-90 per barrel. In the short term, some resistance can be found at USD 88 in Brent, the 61.8% retracement of the September to December slump, while recent established longs above USD 84.75 in Brent and USD 80 in WTI will need reassurance the risk premium can grow further. Failure resulting in a break below the mentioned levels could see the bullish scenario being invalidated.</span></p> <p paraid="2054133513" paraeid="{b5be354f-4193-44c0-a961-6b7548a8c1b5}{160}"><span data-contrast="auto"> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div></div></div><div class="article-image"><img alt="20olh_oil2" src="https://www.home.saxo/-/media/content-hub/images/2024/march/20olh_oil2.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>19 Mch 2024: <a href="https://www.home.saxo/content/articles/commodities/how-to-add-copper-exposure-to-your-portfolio-19032024">How to add copper to your portfolio</a><br /> 15 Mch 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---15-march-2024-15032024"><strong><span>Commodity weekly: Green shoots seen across key sectors</span></strong></a><span><br /> 13 Mch 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/lack-of-catalyst-pushes-crude-into-tightening-range-13032024"><strong><span>Lack of catalyst pushes crude into tightening range</span></strong></a><span><br /> 8 Mch 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---8-march-2024-08032024"><strong><span>Commodity weekly: Gold and silver steal the limelight</span></strong></a><span><br /> 8 Mch 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/options/investing-with-options---gold-optionality-08032024"><strong><span>Investing with options - Gold optionality</span></strong></a><span><br /> 6 Mch 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/how-to-add-gold-exposure-to-your-portfolio-06032024"><strong><span>How to add gold exposure to your portfolio</span></strong></a><span><br /> 6 Mch 2024:&nbsp;</span><a rel="noopener noreferrer" href="https://www.youtube.com/watch?v=ShVBip5DmL0" target="_blank"><strong><span>Video: What happened to the gold prices?</span></strong></a><span><br /> 1 Mch 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-march-2024-01032024"><strong><span>Grains dip, cocoa soars, gold and oil see rays of strength: February&rsquo;s commodity mix</span></strong></a><span><br /> 29 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-29-feb-2024---commodities---why-speculative-interest-is-important-for-everyone-29022024"><strong><span>Podcast: Why speculative interest is important to understand</span></strong></a><span><br /> 28 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/oil-price-stuck-in-neutral-despite-underlying-strength-28022024"><strong><span>Oil price stuck in neutral despite underlying strength</span></strong></a><span><br /> 27 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/resilient-gold-market-defies-lower-rate-cut-predictions-27022024"><strong><span>Resilient gold market defies lower rate cut predictions</span></strong></a><span><br /> 22 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/copper-short-squeeze-fades-ahead-of-key-resistance-22022024"><strong><span>Copper short squeeze fades ahead of key resistance</span></strong></a><span><br /> 21 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/golds-resilience-despite-recent-etf-and-futures-selling-21022024"><strong><span>Gold's resilience despite recent futures and ETF selling</span></strong></a><span><br /> 20 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024"><strong><span>WTI crude eyes resistance amid improved signals</span></strong></a><span><br /> 16 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024"><strong><span>Commodity weekly: Grains tumble; Industrial metals eye China boost</span></strong></a><span><br /> 15 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024"><strong><span>US rate cut delay drives gold below $2000</span></strong></a><span><br /> 13 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a><span><br /> 9 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a><span><br /> 9 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a><span><br /> 7 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a><span><br /> 6 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a><span><br /> 2 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a><span><br /> 1 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a><span><br /> <strong><br /> <strong><span>Previous "Commitment of Traders" articles</span></strong></strong></span></p> <p><strong><span>18 Mch 2024:&nbsp;</span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-march-2024-18032024"><strong><span>COT: Buying spreads from precious metals to copper and grains</span></strong></a><strong><span><br /> <strong><span>11 Mch 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-march-2024-11032024"><strong><span>COT: Specs rush back into gold, elevated yen short in focus</span></strong></a><strong><span><br /> <strong><span>4 Mch 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---4-march-2024-04032024"><strong><span>COT: Underinvested speculators fuel gold's latest surge</span></strong></a><strong><span><br /> <strong><span>26 Feb 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---26-feb-2024-26022024"><strong><span>COT:&nbsp;Record corn short, cocoa surge no longer supported by speculators</span></strong></a><strong><span><br /> <strong><span>19 Feb 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024"><strong><span>COT: US inflation surprise drives broad selling of metals</span></strong></a><strong><span><br /> <strong><span>5 Feb 2024:</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><strong><span><br /> <br /> </span></strong></p> <p><strong><span> <br /> </span></strong></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Inflation</span> <span>Federal Reserve</span> <span>Crude Oil</span> <span>Gas Oil</span> <span>Heating Oil</span> <span>Oil</span> <span>Oil and Gas</span> <span>China</span></div>Wed, 20 Mar 2024 11:00:00 Z2024-03-27T10:51:45Z{409D74E0-E575-4B26-B083-E19D5AA1D2D7}https://www.home.saxo/content/articles/commodities/how-to-add-copper-exposure-to-your-portfolio-19032024Ole Hansenproduct-commoditiesInflationFederal ReserveMiningFocus Inflationcompany-freeport-mcmoran coppercommodity-copperETFTheme - Green transitionTheme - Green metalsHow to add copper exposure to your portfolio<div class="article-excerpt">Copper is called the "King of green metals" given its usage in multiple applications from batteries, electrical traction motors, solar PV technologies, wind turbines, and not least the electrical grid required to deal with the electrification of the world. </div><div class="article-rte"><div class="rte--output"><div> <p><span>Copper is called the "King of green metals" given its usage in multiple applications from batteries, electrical traction motors, solar PV technologies, wind turbines, and not least the electrical grid required to deal with the electrification of the world. </span></p> <p><span>With that in mind, the reddish-orange metal, which has traded range-bound for almost a year, remains one of our favourite industrial metals. This is due to expected robust demand, not least from the aforementioned green transition, but also from the fact global inventories remain near a multi-year low, and due to the increasing risk of supply disruptions and production downgrades. Most of the major miners are dealing with rising labour and construction material costs, as well as lower ore grades as mines mature. </span></p> <p><em><span>High Grade copper futures</span></em></p> </div> <p><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <div> <div> <h3><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="19olh_cop2" src="https://www.home.saxo/-/media/content-hub/images/2024/march/19olh_cop2.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><span data-contrast="auto"><a href="https://www.saxotrader.com/sim/instant-demo/InstantDemo-EN-GL/page/product/FxSpot/8177?activeTab=overview&amp;cmpid=copy_link_platform_sharing"></a></span> <div> <div> <h3 class="article-heading--3"><span>How to invest in/trade copper</span><span>:</span></h3> <p><strong><span>Exchange-traded Funds (ETFs) or Commodities (ETCs): </span></strong><span>One way to gain exposure to copper is with copper ETFs (or ETCs). Copper ETFs are investment funds that either track the price of copper, mostly through an underlying investment in copper futures contracts, or a basket of major mining companies. Investing in ETFs provides exposure to the price movements of copper or copper miners without the need to directly trade futures contracts or own individual mining stocks. Just like equities, copper ETFs are traded on major stock exchanges, making them easily available. </span></p> <p><strong >Copper miners: </strong><span >Another, more indirect, way to gain exposure to copper prices is to invest in copper miners. It is worth noting that no pure copper miner exists; they always mine something else such as gold, silver, or other industrial metals. Investing in mining companies or ETFs that hold a basket of mining stocks provides exposure to copper prices. However, these investments carry operational risks and may exhibit higher volatility compared to copper itself. In the list, we have focused on some of the major miners involved with copper extraction. Compared to copper ETFs, as described above, your exposure to copper is less direct, but, especially if you buy copper mining stocks, you gain exposure to that company instead.</span></p> <h3 paraid="1033937941" paraeid="{40b2c94f-ca78-4b98-88a6-b55cc697fffa}{234}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <div> <p paraid="1425391661" paraeid="{7ae875e5-8831-4f3d-9c4d-e0eec23f9053}{112}"><span data-ccp-props="{'134233117':false,'134233118':false,'335559738':0,'335559739':0}"></span></p> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></div></div><div class="article-image"><img alt="19olh_cop1" src="https://www.home.saxo/-/media/content-hub/images/2024/march/19olh_cop1.png"/></div><div class="article-additional-rte"><div class="rte--output"><p><strong><span>Copper futures and CFDs: </span></strong><span>A third way to invest in copper is through futures or CFDs, which is the most direct and also the most complex. Trading copper futures or contracts for difference (CFDs) involves higher risk due to leverage. While these products offer opportunities for speculation, they also require careful risk management to mitigate potential losses. </span></p> <p><span>One High Grade copper futures contract has a contract size of 25,000 lbs, and based on a price at say USD 4.0 per pound, a contract&rsquo;s value is around USD 100,000. As it is a leveraged product, the buyer or seller of such a futures contract has to provide less than USD 5,000 as collateral, leaving the owner of the position highly exposed to losses without proper risk management. CFDs track the futures price with the main difference being the ability to trade smaller quantities than the 25,000-pound futures contract.</span><span ></span></p> <h3 class="article-heading--3"><span>Which factors drive copper?</span></h3> <p><strong><span>Supply and demand dynamics: </span></strong><span>The fundamental principle of supply and demand plays a significant role in determining copper prices. Increased demand for copper, particularly from industries focusing on electrification, electronics, and automotive can drive prices up. <strong><span>&nbsp;</span></strong>The green transition has become the main driver behind copper demand growth, occurring at a time where miners are struggling with higher input prices from fuel, construction material and labour, as well as lower ore grades requiring more materials to be dug out of the ground to retrieve the copper. Also, rising regulatory and start-up costs for new projects lead to a prolonged period of mismatch between increasing demand and inelastic supply.</span><strong ></strong></p> <p><strong><span>Weather and natural disasters: </span></strong><span>Extreme weather events like hurricanes, floods, and earthquakes are significantly disrupting copper mining and transportation infrastructure. This can affect supply negatively and in turn drive up prices.</span><strong ></strong></p> <p><strong><span>Global economic conditions: </span></strong><span>Copper is widely used in construction and manufacturing, so its price is sensitive to changes in global economic conditions, not least in major economies, such as China and the United States.</span><strong ></strong></p> <p><strong><span>Monetary policy: </span></strong><span>The policies of the US Federal Reserve significantly influence the price of commodities, including industrial metals such as copper. In 2023, rising interest rates drove up the funding cost of holding physical metals and led to a major round of industry destocking, but with rate cuts expected later this year, we may see a demand supportive restocking phase begin.</span><strong ></strong></p> <p><strong><span>Investor sentiment and speculation: </span></strong><span>Like other commodities, copper prices can be influenced by investor sentiment and speculative trading in commodity markets. Factors such as geopolitical tensions, trade disputes, and macroeconomic policy decisions can affect investor perceptions and lead to price fluctuations.</span></p></div></div><div class="article-additional-rte"><div class="rte--output"><hr /> <strong></strong> <p><strong><span>Commodity articles:</span></strong></p> <p><span>15 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---15-march-2024-15032024"><strong><span>Commodity weekly: Green shoots seen across key sectors</span></strong></a></span><span><br /> 13 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/lack-of-catalyst-pushes-crude-into-tightening-range-13032024"><strong><span>Lack of catalyst pushes crude into tightening range</span></strong></a></span><span><br /> 8 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---8-march-2024-08032024"><strong><span>Commodity weekly: Gold and silver steal the limelight</span></strong></a></span><span><br /> 8 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/options/investing-with-options---gold-optionality-08032024"><strong><span>Investing with options - Gold optionality</span></strong></a></span><span><br /> 6 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/how-to-add-gold-exposure-to-your-portfolio-06032024"><strong><span>How to add gold exposure to your portfolio</span></strong></a></span><span><br /> 6 Mch 2024:&nbsp;</span><span><a rel="noopener noreferrer" href="https://www.youtube.com/watch?v=ShVBip5DmL0" target="_blank"><strong><span>Video: What happened to the gold prices?</span></strong></a></span><span><br /> 1 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-march-2024-01032024"><strong><span>Grains dip, cocoa soars, gold and oil see rays of strength: February&rsquo;s commodity mix</span></strong></a></span><span><br /> 29 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-29-feb-2024---commodities---why-speculative-interest-is-important-for-everyone-29022024"><strong><span>Podcast: Why speculative interest is important to understand</span></strong></a></span><span><br /> 28 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/oil-price-stuck-in-neutral-despite-underlying-strength-28022024"><strong><span>Oil price stuck in neutral despite underlying strength</span></strong></a></span><span><br /> 27 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/resilient-gold-market-defies-lower-rate-cut-predictions-27022024"><strong><span>Resilient gold market defies lower rate cut predictions</span></strong></a></span><span><br /> 22 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/copper-short-squeeze-fades-ahead-of-key-resistance-22022024"><strong><span>Copper short squeeze fades ahead of key resistance</span></strong></a></span><span><br /> 21 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/golds-resilience-despite-recent-etf-and-futures-selling-21022024"><strong><span>Gold's resilience despite recent futures and ETF selling</span></strong></a></span><span><br /> 20 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024"><strong><span>WTI crude eyes resistance amid improved signals</span></strong></a></span><span><br /> 16 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024"><strong><span>Commodity weekly: Grains tumble; Industrial metals eye China boost</span></strong></a></span><span><br /> 15 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024"><strong><span>US rate cut delay drives gold below $2000</span></strong></a></span><span><br /> 13 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a></span><span><br /> 7 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a></span><span><br /> 6 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a></span><span><br /> 2 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a></span><span><br /> 1 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a></span><span><br /> <strong><br /> <strong>Previous "Commitment of Traders" articles</strong></strong></span></p> <p><strong><span><strong><span>18 Mch 2024: <a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-march-2024-18032024">COT: Buying spreads from precious metals to copper and grains</a><br /> 11 Mch 2024:&nbsp;</span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-march-2024-11032024"><strong><span>COT: Specs rush back into gold, elevated yen short in focus</span></strong></a><strong><span><br /> <strong>4 Mch 2024:&nbsp;</strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---4-march-2024-04032024"><strong><span>COT: Underinvested speculators fuel gold's latest surge</span></strong></a><strong><span><br /> <strong>26 Feb 2024:&nbsp;</strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---26-feb-2024-26022024"><strong><span>COT:&nbsp;Record corn short, cocoa surge no longer supported by speculators</span></strong></a><strong><span><br /> <strong>19 Feb 2024:&nbsp;</strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024"><strong><span>COT: US inflation surprise drives broad selling of metals</span></strong></a><strong><span><br /> <strong>5 Feb 2024:</strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><strong><span><br /> <br /> </span></strong> <br /> </span></strong></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Inflation</span> <span>Federal Reserve</span> <span>Mining</span> <span>Focus Inflation</span> <span>Freeport-mcmoran Copper</span> <span>Copper</span> <span>ETF</span> <span>Theme - Green transition</span> <span>Theme - Green metals</span></div>Tue, 19 Mar 2024 12:00:00 Z2024-03-27T10:51:46Z{96B11C48-7A5D-47FE-BE2B-D12476B7BAC9}https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-march-2024-18032024Ole Hansenproduct-commoditiesCOT Commoditiescommodity-crude oilcommodity-natural gascommodity-goldcommodity-silvercommodity-coppercommodity-platinumcommodity-corncommodity-sugarcommodity-coffeecommodity-gasolinecommodity-palladiumcommodity-wheatcommodity-cocoacommodity-cottoncommodity-cattlesector-gics-1010product-forexCOT FXforex-eurusdforex-usdjpyforex-audusdforex-usdcadforex-usdchfforex-gbpusdforex-nzdusdsubject-is/fin.stpbondBonds Inspirationproduct-bondsproduct-forexEn hurtig tankeCOT: Hedge funds buying expands from precious metals to copper and grains<div class="article-excerpt">Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to last Tuesday, March 12.</div><div class="article-rte"><div class="rte--output"><h3>What is the Commitments of Traders report?</h3> <p>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.</p> <p><strong>Commodities</strong>: Producer/Merchant/Processor/User, Swap dealers,&nbsp;Managed Money&nbsp;and other<br /> <strong>Financials</strong>: Dealer/Intermediary; Asset Manager/Institutional;&nbsp;Leveraged Funds&nbsp;and other<br /> <strong>Forex</strong>: A broad breakdown between commercial and&nbsp;non-commercial&nbsp;(speculators)</p> <p>The main reasons why we focus primarily on the behavior of speculators, such as hedge funds and trend-following CTA's are:</p> <ul> <li>They are likely to have&nbsp;tight stops&nbsp;and&nbsp;no underlying exposure&nbsp;that is being hedged</li> <li>This makes them&nbsp;most reactive to changes&nbsp;in fundamental or technical price developments</li> <li>It provides views about&nbsp;major trends&nbsp;but also helps to decipher when a&nbsp;reversal&nbsp;is looming</li> </ul> <p>Do note that&nbsp;<span>this group tends to&nbsp;<strong>anticipate</strong>,<strong> accelerate</strong>, and <strong>amplify</strong>&nbsp;price changes that have been set in motion by&nbsp;fundamentals. Being followers of momentum, this strategy often sees this group of traders buy into strength and sell into weakness, meaning that they are often found holding the biggest long near the peak of a cycle or the biggest short position ahead of a through in the market.<br /> </span></p> <hr /> <h3 class="article-heading--3">Forex:&nbsp;</h3> <p>Broad dollar weakness during the reporting period did not translate into broad selling from speculators, with buying of GBP (+12k to 70.5k), EUR (+8k to 74.4k) and not least JPY (+16.5k to -102.3k) being partly offset by selling of NZD, AUD and CAD. Overall, the gross dollar long against eight IMM forex futures fell by 55% to near neutral at USD 1.26 billion. In focus this week will be Tuesday&rsquo;s Bank of Japan decision on whether to pivot away from negative rates, but gains in the yen could remain limited by dovish commentary and risks of a hawkish surprise by the Fed on Wednesday when the FOMC meets.</p> <p>For the past three years, speculators have traded the yen with a short bias, culminating last month when the net short reached 133,000 contract (USD 11.3 billion) before two weeks of short covering lowered the net short to the current 102.3k contracts.</p></div></div><div class="article-image"><img alt="18olh_cot6" src="https://www.home.saxo/-/media/content-hub/images/2024/march/18olh_cot6.png"/></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3">Commodities</h3> <p>The Bloomberg Commodity index, which tracks a basket of 24 major futures markets split between energy (30.1%), metals (34.2%) and agriculture (35.7%), traded higher for a second week, and while it was precious metals at the start of the month that led the gains, last week saw broad gains emerging across all sectors. Out of the 26 futures contracts tracked in this, only crude oil and natural gas saw notable declines while all other sectors traded higher, including the beaten-down grain sector with hedge funds reducing a record short position ahead of the Northern Hemisphere planting season.</p> <p>On an individual level, the biggest changes based on nominal values was the USD 6.2 billion increase in gold lifting the net to USD 34.6 billion, and now exceeding the combined net long in WTI and Brent crude oil at USD 32.4 billion. Other notable buying activity was seen in silver, platinum, copper, soybeans and corn.</p></div></div><div class="article-image"><img alt="18olh_cot1" src="https://www.home.saxo/-/media/content-hub/images/2024/march/18olh_cot1.png"/></div><div class="article-image"><img alt="18olh_cot2" src="https://www.home.saxo/-/media/content-hub/images/2024/march/18olh_cot2.png"/></div><div class="rte--output">Energy: Ahead of last week’s upside break, the crude net long was reduced for a second week, with the bulk of the 16.7k contract reduction being profit-taking. Higher fuel prices due to Ukraine attacks on Russian plants had a limited positive impact on positioning.</div><br/><div class="article-image"><img alt="18olh_cot3" src="https://www.home.saxo/-/media/content-hub/images/2024/march/18olh_cot3.png"/></div><div class="rte--output">Metals: Gold’s surge to a fresh record was supported by another strong week of hedge funds buying. In just two weeks funds bought 91.5 contracts or 285 tons, lifting the net long to a two-year high at 159.6k. Silver reached an 8-month high at 26.7k while copper flipped back to an 8.5k long, with traders spending the rest of the week chasing the price higher to rebuild bullish bets.</div><br/><div class="article-image"><img alt="18olh_cot4" src="https://www.home.saxo/-/media/content-hub/images/2024/march/18olh_cot4.png"/></div><div class="rte--output">Grains: first week of meaningful buying (+77k contracts) since last July, led by soybeans (+16.8k to -155.1k) and corn (+40.9k to -256k.</div><br/><div class="article-image"><img alt="18olh_cot5" src="https://www.home.saxo/-/media/content-hub/images/2024/march/18olh_cot5.png"/></div><div class="rte--output">Softs: funds turned cocoa buyers for the first time in seven weeks, thereby adding further fuel to an ongoing parabolic rise. Cotton saw the first small reversal following an eight-week buying spree.</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><span>15 Mch 2024: <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---15-march-2024-15032024">Commodity weekly: Green shoots seen across key sectors</a><br /> 13 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/lack-of-catalyst-pushes-crude-into-tightening-range-13032024"><strong><span>Lack of catalyst pushes crude into tightening range</span></strong></a></span><span><br /> 8 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---8-march-2024-08032024"><strong><span>Commodity weekly: Gold and silver steal the limelight</span></strong></a></span><span><br /> 8 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/options/investing-with-options---gold-optionality-08032024"><strong><span>Investing with options - Gold optionality</span></strong></a></span><span><br /> 6 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/how-to-add-gold-exposure-to-your-portfolio-06032024"><strong><span>How to add gold exposure to your portfolio</span></strong></a></span><span><br /> 6 Mch 2024:&nbsp;</span><span><a rel="noopener noreferrer" href="https://www.youtube.com/watch?v=ShVBip5DmL0" target="_blank"><strong><span>Video: What happened to the gold prices?</span></strong></a></span><span><br /> 1 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-march-2024-01032024"><strong><span>Grains dip, cocoa soars, gold and oil see rays of strength: February&rsquo;s commodity mix</span></strong></a></span><span><br /> 29 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-29-feb-2024---commodities---why-speculative-interest-is-important-for-everyone-29022024"><strong><span>Podcast: Why speculative interest is important to understand</span></strong></a></span><span><br /> 28 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/oil-price-stuck-in-neutral-despite-underlying-strength-28022024"><strong><span>Oil price stuck in neutral despite underlying strength</span></strong></a></span><span><br /> 27 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/resilient-gold-market-defies-lower-rate-cut-predictions-27022024"><strong><span>Resilient gold market defies lower rate cut predictions</span></strong></a></span><span><br /> 22 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/copper-short-squeeze-fades-ahead-of-key-resistance-22022024"><strong><span>Copper short squeeze fades ahead of key resistance</span></strong></a></span><span><br /> 21 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/golds-resilience-despite-recent-etf-and-futures-selling-21022024"><strong><span>Gold's resilience despite recent futures and ETF selling</span></strong></a></span><span><br /> 20 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024"><strong><span>WTI crude eyes resistance amid improved signals</span></strong></a></span><span><br /> 16 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024"><strong><span>Commodity weekly: Grains tumble; Industrial metals eye China boost</span></strong></a></span><span><br /> 15 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024"><strong><span>US rate cut delay drives gold below $2000</span></strong></a></span><span><br /> 13 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a></span><span><br /> 7 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a></span><span><br /> 6 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a></span><span><br /> 2 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a></span><span><br /> 1 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a></span><span><br /> <strong><br /> <strong><span>Previous "Commitment of Traders" articles</span></strong></strong></span></p> <p><strong><span>11 Mch 2024:&nbsp;</span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-march-2024-11032024"><strong><span>COT: Specs rush back into gold, elevated yen short in focus</span></strong></a><strong><span><br /> <strong><span>4 Mch 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---4-march-2024-04032024"><strong><span>COT: Underinvested speculators fuel gold's latest surge</span></strong></a><strong><span><br /> <strong><span>26 Feb 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---26-feb-2024-26022024"><strong><span>COT:&nbsp;Record corn short, cocoa surge no longer supported by speculators</span></strong></a><strong><span><br /> <strong><span>19 Feb 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024"><strong><span>COT: US inflation surprise drives broad selling of metals</span></strong></a><strong><span><br /> <strong><span>5 Feb 2024:</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><strong><span><br /> <br /> </span></strong></p> <p><strong><span></span></strong><span><br /> </span></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>COT Commodities</span> <span>Crude Oil</span> <span>Natural Gas</span> <span>Gold</span> <span>Silver</span> <span>Copper</span> <span>Platinum</span> <span>Corn</span> <span>Sugar</span> <span>Coffee</span> <span>Gasoline</span> <span>Palladium</span> <span>Wheat</span> <span>Cocoa</span> <span>Cotton</span> <span>Cattle</span> <span>Energy (Sector)</span> <span>Forex</span> <span>COT FX</span> <span>EURUSD</span> <span>USDJPY</span> <span>AUDUSD</span> <span>USDCAD</span> <span>USDCHF</span> <span>GBPUSD</span> <span>NZDUSD</span> <span>Government Bonds</span> <span>Bonds nspiration</span> <a href="https://www.home.saxo/insights/news-and-research/bonds">Bonds</a> <a href="https://www.home.saxo/insights/news-and-research/forex">Forex</a> <span>En hurtig tanke</span></div>Mon, 18 Mar 2024 11:30:00 Z2024-03-27T10:51:48Z{6F13F0F7-A5BF-4C50-9353-B56A14CDC995}https://www.home.saxo/content/articles/commodities/commodity-weekly---15-march-2024-15032024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal Reservecommodity-gas oilcommodity-crude oilcommodity-heating oilsector-Oil and GasOilcommodity-copperAgricultureplace-lc/cnHighlighted articlescommodity-wheatIron Orecommodity-natural gasCommodity weekly: Green shoots seen across key sectors<div class="article-excerpt">The commodity sector recorded a third consecutive weekly gain, and while it was precious metals and softs attracting most of the attention at the beginning of March, we have during the past couple of weeks seen emerging strength across all sectors </div><div class="article-rte"><div class="rte--output"><span></span> <ul> <li><span>Broad gains drive the Bloomberg Commodity Index to a three-month high </span></li> <li><span>Strength in energy and industrial metals point to end of year-long consolidation </span></li> <li><span>Copper at an 11-month high supporting strong week for copper miners </span></li> <li><span>Crude oil pops on IEA flip, but is it enough to break the long-held range? </span></li> <li><span>Silver and copper strength supporting gold despite yield and dollar headwinds</span></li> </ul> <p><span>The commodity sector recorded a third consecutive weekly gain, and while it was precious metals and softs attracting most of the attention at the beginning of March, we have during the past couple of weeks seen strength across all sectors with wheat and uranium being two of the notable exceptions. The Bloomberg Commodity Total Return Index, which tracks a basket of 24 major commodity futures spread evenly between energy, metals, and agriculture, reached a three-month high, and it has raised the question whether the year-long consolidation phase is ending?</span></p> <p><span> </span></p></div></div><div class="article-image"><img alt="15olh_wcu0" src="https://www.home.saxo/-/media/content-hub/images/2024/march/15olh_wcu0.png"/></div><div class="article-additional-rte"><div class="rte--output"><p><span> </span></p> <div> <p><span>WTI and Brent crude oil reached four-month highs after the IEA flipped their 2024 supply and demand forecast to a deficit amid an expected prolonged period of production cuts from OPEC+. Supported by silver, gold meanwhile remains resilient, holding onto most of its recent strong gains despite dollar and yield strength following stronger-than-expected CPI and PPI prints this week. Data which led the market to conclude the US Federal Reserve will adopt a cautious stance and would like to see more evidence of inflation falling towards the 2% target. As a result bets on a 25 bp rate cut in June fell to 75% from 95% at the start of the week. </span></p> <p><span>Copper and copper miners meanwhile attracted a great deal of attention after the King of Green metals reached an 11-month high following a 6% jump supported by already tight market conditions potentially made worse by the prospect for Chinese smelters cutting production. Iron ore (down 30% YTD) slumped below USD 100 per tonnes as China&rsquo;s property crisis will continue to keep a lid on steel demand. Uranium&rsquo;s long-term upside potential remains intact despite recent stop-loss selling from investors who got caught up in the January buying frenzy.</span></p> <p><span>The agriculture sector saw cocoa reach a fresh record at USD 7700 per tonnes, more than three times the five-year average price. The New York futures contract trades up 87% on the year as a production shortfall in West Africa shows no signs of improving. Hedge funds, meanwhile, continue to hold onto a near-record grains sector short, led by corn and soybeans, a risky bet ahead of the Northern Hemisphere planting and growing season, where weather developments will become the key focus.</span></p> </div></div></div><div class="article-image"><img alt="15olh_wcu1" src="https://www.home.saxo/-/media/content-hub/images/2024/march/15olh_wcu1.png"/></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>Copper and copper miners break higher on China smelter curbs</span></h3> <p><span>Copper and copper mining stocks pushed higher this past week with HG copper breaking above USD 4 per pound and LME above USD 8700 per tons to reach 11-month peaks, while ETFs tracking copper mining stocks surged by more than 6%. Over the past month, the metal has steadily climbed, buoyed by a weakening dollar, optimism in post-Lunar holiday demand in China, and material downgrades to 2024 mine supply increasingly tightening market conditions. Several mining companies have announced production downgrades due to factors like increased input costs, declining ore grades, rising regulatory expenses, and weather-related disruptions.</span></p> <p><span>The latest rally pushing prices higher, was fueled by Chinese smelters reaching a rare agreement to jointly cut production of refined metals to cope with shortages of raw material. China, the world&rsquo;s largest copper production hub, has witnessed smelters vie for scarce supply by slashing their processing fees, resulting in a downward trend in treatment and refining charges to near zero.</span></p> <p><span>Furthermore, the ongoing green transformation is augmenting demand from traditional sectors like housing and construction. An anticipated initiation of a US rate-cutting cycle later this year may prompt companies, which depleted inventories last year to mitigate funding costs, to restock. We maintain our long-standing bullish stance on copper, and with copper miners also exhibiting signs of resurgence, the possibility of a fresh record high in the second half of the year appears achievable.</span></p> <p><em >The Global X Copper Miners UCITS ETF tracks the performance of 37 copper-focused miners, such as Antofagasta, Ivanhoe, Lundin Mining, Southern Copper and Zijin Mining Group. From a geographic perspective the exposure is primarily in Canada (37%) followed by the U.S. (10%) and Australia (10%). The ETF trades up 8% YTD and 12% YOY.</em></p> <p><span> </span></p></div></div><div class="article-image"><img alt="15olh_wcu2" src="https://www.home.saxo/-/media/content-hub/images/2024/march/15olh_wcu2.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>Lithium sector stabilising amid production cutbacks</span></h3> <p><span>Lithium, a key component in rechargeable lithium-ion batteries, shows signs of stabilising after producers, responding to an 80% price collapse last year, have started to trim production, potentially by as much as one-third according to analysts. During the past month, we have seen similar initiatives by US natural gas producers who have made temporary cutbacks to support prices and to bring down an overhang of stocks, currently more than 37% above the five-year average. Developments that for both commodities support the old saying that the best cure for low prices is low prices as it lowers production while for some commodities stimulates demand.</span></p> While spot Lithium has stabilized it is interesting to note that the China Lithium Carbonate 99.5% benchmark has rallied by 21% so far this year, potentially signaling improved fundamentals. Meanwhile, the Solactive Global Lithium Index, which tracks the performance of 40 of the largest and most liquid lithium-related companies, trades down around 11% during the same period. The index includes well-known names like Albemarle Corp, TDK Corp, and Pilbara Minerals, some of which have been weighed down by heavy short selling from hedge funds, but with sentiment showing signs of improvement, these shorts are now at risk, leaving the sector exposed to further gains should the recent recovery continue.<br /> <br /> <h3 class="article-heading--3">Crude oil at four-month high on IEA flip</h3> <br /> <p><span >In our mid-week crude update, we highlighted how the recent lack of a price catalyst had pushed the four-week rolling average trading range in WTI and Brent to a ten-year low. Crude has nevertheless been seeing a steady but calm ascent since December, when Houthi attacks on ships in the Red Sea raised the geopolitical temperature while supporting tighter market conditions with millions of barrels of crude and fuel products being stuck at sea for longer.</span></p> <p><span >However, since then the combination of Ukrainian drone strikes on Russian refineries, which according to estimates may reduce Russia&rsquo;s refinery runs by 300k barrels per day in 2024, and not least the IEA flipping their 2024 forecast to a deficit, both help drive WTI and Brent higher. In their latest Oil Market Report (OMR) for March, the International Energy Agency (IEA) raised their global oil demand forecast to 1.3 million barrels per day, while shifting their balance for the year from a surplus to a deficit based on the assumption OPEC+ will maintain current production curbs through 2024.</span></p> <p><span >Ahead of the IEA news, crude prices had slipped after the Energy Information Administration (EIA) raised their US crude production forecast to a record 13.65m barrels/day in 2025 from 13.19m barrels/day this year, while OPEC in their latest monthly update wrote supply cuts had stalled as Iraq for a second month produced around 200k barrels/day above its quota.</span></p> <p><span >Brent crude broke above former resistance in the USD 85 per barrel area, but lack of follow-through buying ahead of the weekend potentially highlighting a market that remains range-bound, but with a small upward bias. Using Fibonacci retracement levels, the next key resistance is located at USD 88 per barrel.</span></p></div></div><div class="article-image"><img alt="15olh_wcu3" src="https://www.home.saxo/-/media/content-hub/images/2024/march/15olh_wcu3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>Gold enjoys the tailwind from copper and silver strength</span></h3> <p><span>Gold continues to show a great deal of resilience, having so far given back less than 40 dollars of the 170 dollars it gained during the previous two weeks. This during a week that saw stronger-than-expected US inflation data from CPI to PPI potentially delaying the beginning of the US rate cut cycle. The data prints helped send US treasury yields higher while the dollar recorded its first weekly gain in four. However, countering these developments was the mentioned rally in copper which drove a gold-supportive run higher in silver.</span></p> <p><span>Underlying support has for months been provided by central banks, some of which are buying gold to reduce their exposure to the dollar, and continued strong demand from retail investors in Asia, most notably in China where stock market weakness and falling property prices are forcing the middle class to look elsewhere. In the short-term, some of that demand may slow while investors adopt to the new and higher price level, but with heightened geopolitical tensions reducing short-selling appetite, we feel that gold&rsquo;s current buy-on-dips credentials has only been strengthened.</span></p> <p><span>Without participation from ETF investors who remain net sellers, the recent rally has primarily been driven by under-invested hedge funds who rushed back onto the long side after several key resistance levels were broken. In the week to 5 March when gold rallied 4.8%, money managers such as hedge funds and CTAs bought 63k futures contracts (195 tonnes), the biggest one-week increase since June 2019, and with buying extending into the following period, this group of traders now hold an elevated position, that needs to be protected, potentially another reason why gold has not been allowed to fall in response to this week&rsquo;s yield and dollar rally.</span></p> <p><span>While perplexed about the timing of the latest surge to a record, occurring despite the prospect for a delayed start to the US rate cutting cycle, we maintain our USD 2300 target with the technical picture potentially pointing to an even higher level around USD 2500. In the short-term the risk of a deeper correction to USD 2135, the December 4 high, can not be ruled out. Silver meanwhile needs to build a base in the USD 24 to 24.50 area from where it may attempt to mount a fresh attempt at the April 2023 highs around USD 26.</span></p></div></div><div class="article-image"><img alt="15olh_wcu4" src="https://www.home.saxo/-/media/content-hub/images/2024/march/15olh_wcu4.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <strong></strong> <p><strong><span>Commodity articles:</span></strong></p> <p><span>13 Mch 2024: <a href="https://www.home.saxo/content/articles/commodities/lack-of-catalyst-pushes-crude-into-tightening-range-13032024">Lack of catalyst pushes crude into tightening range</a><br /> 8 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---8-march-2024-08032024"><strong><span>Commodity weekly: Gold and silver steal the limelight</span></strong></a></span><span><br /> 8 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/options/investing-with-options---gold-optionality-08032024"><strong><span>Investing with options - Gold optionality</span></strong></a></span><span><br /> 6 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/how-to-add-gold-exposure-to-your-portfolio-06032024"><strong><span>How to add gold exposure to your portfolio</span></strong></a></span><span><br /> 6 Mch 2024:&nbsp;</span><span><a rel="noopener noreferrer" href="https://www.youtube.com/watch?v=ShVBip5DmL0" target="_blank"><strong><span>Video: What happened to the gold prices?</span></strong></a></span><span><br /> 1 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-march-2024-01032024"><strong><span>Grains dip, cocoa soars, gold and oil see rays of strength: February&rsquo;s commodity mix</span></strong></a></span><span><br /> 29 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-29-feb-2024---commodities---why-speculative-interest-is-important-for-everyone-29022024"><strong><span>Podcast: Why speculative interest is important to understand</span></strong></a></span><span><br /> 28 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/oil-price-stuck-in-neutral-despite-underlying-strength-28022024"><strong><span>Oil price stuck in neutral despite underlying strength</span></strong></a></span><span><br /> 27 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/resilient-gold-market-defies-lower-rate-cut-predictions-27022024"><strong><span>Resilient gold market defies lower rate cut predictions</span></strong></a></span><span><br /> 22 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/copper-short-squeeze-fades-ahead-of-key-resistance-22022024"><strong><span>Copper short squeeze fades ahead of key resistance</span></strong></a></span><span><br /> 21 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/golds-resilience-despite-recent-etf-and-futures-selling-21022024"><strong><span>Gold's resilience despite recent futures and ETF selling</span></strong></a></span><span><br /> 20 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024"><strong><span>WTI crude eyes resistance amid improved signals</span></strong></a></span><span><br /> 16 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024"><strong><span>Commodity weekly: Grains tumble; Industrial metals eye China boost</span></strong></a></span><span><br /> 15 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024"><strong><span>US rate cut delay drives gold below $2000</span></strong></a></span><span><br /> 13 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a></span><span><br /> 7 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a></span><span><br /> 6 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a></span><span><br /> 2 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a></span><span><br /> 1 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a></span><span><br /> <strong><br /> <strong>Previous "Commitment of Traders" articles</strong></strong></span></p> <p><strong><span> <strong><span>11 Mch 2024:&nbsp;</span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-march-2024-11032024"><strong><span>COT: Specs rush back into gold, elevated yen short in focus</span></strong></a><strong><span><br /> <strong>4 Mch 2024:&nbsp;</strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---4-march-2024-04032024"><strong><span>COT: Underinvested speculators fuel gold's latest surge</span></strong></a><strong><span><br /> <strong>26 Feb 2024:&nbsp;</strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---26-feb-2024-26022024"><strong><span>COT:&nbsp;Record corn short, cocoa surge no longer supported by speculators</span></strong></a><strong><span><br /> <strong>19 Feb 2024:&nbsp;</strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024"><strong><span>COT: US inflation surprise drives broad selling of metals</span></strong></a><strong><span><br /> <strong>5 Feb 2024:</strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><strong><span><br /> <br /> </span></strong></span></strong><span><br /> </span></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Gas Oil</span> <span>Crude Oil</span> <span>Heating Oil</span> <span>Oil and Gas</span> <span>Oil</span> <span>Copper</span> <span>Agriculture</span> <span>China</span> <span>Highlighted articles</span> <span>Wheat</span> <span>Iron Ore</span> <span>Natural Gas</span></div>Fri, 15 Mar 2024 13:00:00 Z2024-03-27T10:51:46Z{0B0A6902-4F8F-4DDE-A8EE-1DC2FA2A0350}https://www.home.saxo/content/articles/commodities/lack-of-catalyst-pushes-crude-into-tightening-range-13032024Ole Hansenproduct-commoditiesInflationFederal Reservecommodity-crude oilcommodity-gas oilcommodity-heating oilOilsector-Oil and Gasplace-lc/cnLack of catalyst pushes crude into tightening range<div class="article-excerpt">Crude oil’s steady ascent since December shows sign of running out of steam.</div><div class="article-rte"><div class="rte--output"><span></span> <div> <ul> <li>Crude oil's steady ascent since December faces resistance as attempts to breach USD 80 (WTI) and USD 85 (Brent) falter.</li> <li>Despite recent buildup in hedge funds' long positioning, the lack of a clear catalyst raises skepticism for an immediate upside breakout in crude oil prices.</li> <li>Narrowing trading ranges in Brent and WTI, reaching a ten-year low, reflect the market's indecision and the success of OPEC+ in keeping prices supported</li> </ul> <hr /> <p paraid="727913280" paraeid="{b5be354f-4193-44c0-a961-6b7548a8c1b5}{122}"><span data-contrast="auto"><span data-contrast="auto">Crude oil&rsquo;s steady ascent since December, when Houthi attacks on ships in the Red Sea raised the geopolitical temperature while supporting tighter supply conditions with millions of barrels of crude and fuel being stuck at sea for longer, is showing signs of running out of steam. Recently WTI made an unsuccessful attempt to break above USD 80 resistance while Brent&rsquo;s upside move was arrested well ahead of key resistance at USD 85. While a recent buildup in hedge funds' long positioning and the current price behavior support an upside break, we stay skeptical given the lack of a clear catalyst to trigger&nbsp;such a move.</span><span data-ccp-props="{'134233117':false,'134233118':false,'201341983':0,'335551550':1,'335551620':1,'335559685':0,'335559737':0,'335559738':0,'335559739':160,'335559740':276}"></span></span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="317082785" paraeid="{b5be354f-4193-44c0-a961-6b7548a8c1b5}{136}"><span data-contrast="auto">The impact of the crude markets' inability to break higher, or lower for that matter, can be seen in the narrowing trading ranges with the four-week rolling trading range in Brent and WTI both falling to a ten-year low with a range in WTI this past month of USD 5.3 and just USD 4.2 in Brent. While the geopolitical temperature has moved higher by a few degrees since December we have yet to experience any disruptions, and the market has concluded that such a risk is currently very low.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1952766456" paraeid="{b5be354f-4193-44c0-a961-6b7548a8c1b5}{142}"><span data-contrast="auto">Without OPEC+ supporting prices through supply cutbacks &ndash; which on paper total roughly 2 million barrels per day &ndash; Brent crude would most likely have traded in the low USD 70&rsquo;s or perhaps even lower. So, while the efforts have not yielded higher prices many of the producers need to balance their budgets, prices have held steady and high enough to ensure robust production growth from non-OPEC+ members. Not least the US which according to EIA&rsquo;s latest </span><a href="https://www.eia.gov/outlooks/steo/report/index.php" target="_blank" rel="noopener noreferrer"><span data-contrast="none">Short-term Energy Outlook</span></a><span data-contrast="auto"> could see production accelerate to a record 13.65m barrels/day in 2025 from 13.19m barrels/day this year.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="13olh_oil0" src="https://www.home.saxo/-/media/content-hub/images/2024/march/13olh_oil0.png"/></div><div class="rte--output">Source: Saxo </div><br/><div class="article-additional-rte"><div class="rte--output"><div> <div> <p paraid="2054133513" paraeid="{b5be354f-4193-44c0-a961-6b7548a8c1b5}{160}"><span data-contrast="auto">Crude trades higher today after yesterday&rsquo;s hotter-than-expected US inflation print did little to alter the market's view on the timing and subsequent depth of incoming growth-supportive US rate cuts. In addition, the market also received a boost after the American Petroleum Institute reported across-the-board reductions in US crude and fuel stocks (see table insert in chart above). Before then the market had slipped after OPEC in their latest monthly update wrote supply cuts had stalled as Iraq for a second month produced around 200k barrels/day above its quota.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="948690177" paraeid="{b5be354f-4193-44c0-a961-6b7548a8c1b5}{174}"><span data-contrast="auto">At this time of year, US crude stocks tend to rise while fuel stocks drop amid lower refinery activity during the annual maintenance season. Stock levels of all three trail their five-year averages, not least distillates or diesel inventories which have fallen for seven straight weeks, hitting the lowest level since December. If confirmed by the EIA later today, the API reported drop in crude oil stocks would be the first in seven weeks. I will post the results of the EIA report on X at <a rel="noopener noreferrer" href="http://" target="_blank">@ole_s_hansen</a> once published at 13:30 GMT.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div></div></div><div class="article-image"><img alt="13olh_oil2" src="https://www.home.saxo/-/media/content-hub/images/2024/march/13olh_oil2.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <p paraid="1893055308" paraeid="{b5be354f-4193-44c0-a961-6b7548a8c1b5}{185}"><span data-contrast="auto">Managed money accounts, such as hedge funds and CTA&rsquo;s, have been a main source of price support in recent months with net buying since December 15 driving up the combined net long by 250,000 futures contracts (250 million barrels) to 421,000, and while the initial buying was concentrated in Brent amid supply disruption risks, WTI has been the main recipient during the past month. However, with the upside momentum now showing signs of stalling that buying support may stall as well, leaving both crude contracts exposed to long liquidation should prices turn lower.<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="225989778" paraeid="{b5be354f-4193-44c0-a961-6b7548a8c1b5}{191}"><span data-contrast="auto">For now, as mentioned we see no catalysts on the short-term horizon strong enough to force a change, with day traders focusing on rangebound trading strategies instead of looking for breakouts to drive fresh momentum.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div></div></div><div class="article-image"><img alt="13olh_oil3" src="https://www.home.saxo/-/media/content-hub/images/2024/march/13olh_oil3.png"/></div><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>8 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---8-march-2024-08032024"><strong><span>Commodity weekly: Gold and silver steal the limelight</span></strong></a></span><span><br /> 8 Mch 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/options/investing-with-options---gold-optionality-08032024"><strong><span>Investing with options - Gold optionality</span></strong></a><span><br /> 6 Mch 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/how-to-add-gold-exposure-to-your-portfolio-06032024"><strong><span>How to add gold exposure to your portfolio</span></strong></a><span><br /> 6 Mch 2024:&nbsp;</span><a rel="noopener noreferrer" href="https://www.youtube.com/watch?v=ShVBip5DmL0" target="_blank"><strong><span>Video: What happened to the gold prices?</span></strong></a><span><br /> 1 Mch 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-march-2024-01032024"><strong><span>Grains dip, cocoa soars, gold and oil see rays of strength: February&rsquo;s commodity mix</span></strong></a><span><br /> 29 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-29-feb-2024---commodities---why-speculative-interest-is-important-for-everyone-29022024"><strong><span>Podcast: Why speculative interest is important to understand</span></strong></a><span><br /> 28 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/oil-price-stuck-in-neutral-despite-underlying-strength-28022024"><strong><span>Oil price stuck in neutral despite underlying strength</span></strong></a><span><br /> 27 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/resilient-gold-market-defies-lower-rate-cut-predictions-27022024"><strong><span>Resilient gold market defies lower rate cut predictions</span></strong></a><span><br /> 22 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/copper-short-squeeze-fades-ahead-of-key-resistance-22022024"><strong><span>Copper short squeeze fades ahead of key resistance</span></strong></a><span><br /> 21 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/golds-resilience-despite-recent-etf-and-futures-selling-21022024"><strong><span>Gold's resilience despite recent futures and ETF selling</span></strong></a><span><br /> 20 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024"><strong><span>WTI crude eyes resistance amid improved signals</span></strong></a><span><br /> 16 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024"><strong><span>Commodity weekly: Grains tumble; Industrial metals eye China boost</span></strong></a><span><br /> 15 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024"><strong><span>US rate cut delay drives gold below $2000</span></strong></a><span><br /> 13 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a><span><br /> 9 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a><span><br /> 9 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a><span><br /> 7 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a><span><br /> 6 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a><span><br /> 2 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a><span><br /> 1 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a><span><br /> <strong><br /> <strong><span>Previous "Commitment of Traders" articles</span></strong></strong></span></p> <p><strong><span>11 Mch 2024: <a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-march-2024-11032024">COT: Specs rush back into gold, elevated yen short in focus</a><br /> 4 Mch 2024:&nbsp;</span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---4-march-2024-04032024"><strong><span>COT: Underinvested speculators fuel gold's latest surge</span></strong></a><strong><span><br /> <strong><span>26 Feb 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---26-feb-2024-26022024"><strong><span>COT:&nbsp;Record corn short, cocoa surge no longer supported by speculators</span></strong></a><strong><span><br /> <strong><span>19 Feb 2024:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024"><strong><span>COT: US inflation surprise drives broad selling of metals</span></strong></a><strong><span><br /> <strong><span>5 Feb 2024:</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><strong><span><br /> <br /> </span></strong></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Inflation</span> <span>Federal Reserve</span> <span>Crude Oil</span> <span>Gas Oil</span> <span>Heating Oil</span> <span>Oil</span> <span>Oil and Gas</span> <span>China</span></div>Wed, 13 Mar 2024 12:00:00 Z2024-03-27T10:51:46Z{8DD3C197-AABC-481C-A926-85444AF8E12A}https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-march-2024-11032024Ole Hansenproduct-commoditiesCOT Commoditiescommodity-crude oilcommodity-natural gascommodity-goldcommodity-silvercommodity-coppercommodity-platinumcommodity-corncommodity-sugarcommodity-coffeecommodity-gasolinecommodity-palladiumcommodity-wheatcommodity-cocoacommodity-cottoncommodity-cattlesector-gics-1010product-forexCOT FXforex-eurusdforex-usdjpyforex-audusdforex-usdcadforex-usdchfforex-gbpusdforex-nzdusdsubject-is/fin.stpbondBonds Inspirationproduct-bondsproduct-forexEn hurtig tankeCOT: Specs rush back into gold, elevated JPY short in focus<div class="article-excerpt">Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to last Tuesday, March 5.</div><div class="article-rte"><div class="rte--output"><h3>What is the Commitments of Traders report?</h3> <p>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.</p> <p><strong>Commodities</strong>: Producer/Merchant/Processor/User, Swap dealers,&nbsp;Managed Money&nbsp;and other<br /> <strong>Financials</strong>: Dealer/Intermediary; Asset Manager/Institutional;&nbsp;Leveraged Funds&nbsp;and other<br /> <strong>Forex</strong>: A broad breakdown between commercial and&nbsp;non-commercial&nbsp;(speculators)</p> <p>The main reasons why we focus primarily on the behavior of speculators, such as hedge funds and trend-following CTA's are:</p> <ul> <li>They are likely to have&nbsp;tight stops&nbsp;and&nbsp;no underlying exposure&nbsp;that is being hedged</li> <li>This makes them&nbsp;most reactive to changes&nbsp;in fundamental or technical price developments</li> <li>It provides views about&nbsp;major trends&nbsp;but also helps to decipher when a&nbsp;reversal&nbsp;is looming</li> </ul> <p>Do note that&nbsp;<span>this group tends to&nbsp;<strong>anticipate</strong>, <strong>accelerate</strong>, and <strong>amplify</strong>&nbsp;price changes that have been set in motion by&nbsp;fundamentals or technical developments. Being followers of momentum, this strategy often sees this group of traders buy into strength and sell into weakness, meaning that they are often found holding the biggest long near the peak of a cycle or the biggest short position ahead of a through in the market.<br /> </span></p> <hr /></div></div><div class="article-additional-rte"><div class="rte--output"><span></span> <div> <span></span> <span></span> <div> <span></span> <div> <div> <div> <div> <div> <div> <div> <span></span> <div> <div> <span data-contrast="none"></span><span></span> <div> <span data-contrast="none"></span> <div> <span data-contrast="none"></span> <div> <span></span> <span></span> <div> <span></span> <div><span></span><span></span> <div> <p paraid="1136190424" paraeid="{78e4c838-a3b5-4852-8830-301e6cdba1dc}{58}"><span data-contrast="none">This summary highlights futures positions and changes made by hedge funds across commodities and forex in the week to last Tuesday, March 5. A strong week for precious metals, led by gold&rsquo;s surge to a record high, supported by a softer dollar and weaker bond yields on signs of softening economic data ahead of Fed Chair Powell&rsquo;s testimony to Congress. In forex, the focus centered around the Japanese yen, and the risk of accelerated short covering as the Bank of Japan move closer to hiking rates for the first time since 2007.&nbsp;<br /> </span><span data-ccp-props="{'201341983':0,'335559740':259}"></span></p> </div> <div> <h3><span data-contrast="none">Commodities:</span></h3> </div> <div> <p paraid="1104294112" paraeid="{78e4c838-a3b5-4852-8830-301e6cdba1dc}{128}"><span data-contrast="auto">The Bloomberg Commodity index, which tracks a basket of 24 major futures markets split between energy (30.1%), metals (34.2%) and agriculture (35.7%), traded higher during the reporting period with gains primarily being led by precious metals with silver adding 5.4% while gold reached a fresh record high. The energy sector traded mixed with selling of crude and fuel, being offset by an 8% jump in natural gas as more producers announced cutbacks in order to support prices through a lowering of bloated stock levels. The grains sector traded mixed with net selling resuming amid a global overhang of key crops, led by soybeans and corn. Cocoa&rsquo;s recent parabolic rise paused after producer short covering showed signs of running out of steam.&nbsp;<br /> <br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="940461650" paraeid="{78e4c838-a3b5-4852-8830-301e6cdba1dc}{178}"><span data-contrast="auto">On an individual level, the biggest changes based on nominal values was the USD 13.5 billion increase in the gold net long to USD 28.1 billion, in the process getting close to exceeding the combined long exposure in crude oil which fell USD 0.8 billion to USD 33.8 billion. Other notable buying activity was centered around Silver and natural gas while sellers attacked Brent, copper, soybeans, and sugar.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="196724374" paraeid="{b97640b3-da69-4c4a-9e0a-484912101cb3}{166}"><span ></span></p> </div> <div> <p paraid="1951631753" paraeid="{db890906-2cbf-41d3-a1d1-41a0a15275d4}{57}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div> </div> <div> <p paraid="1815481085" paraeid="{9dc17bdc-2b11-4bfd-b9b9-624ec6b0c42a}{183}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div> </div> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}" ></span></div> </div> <p paraid="1396398248" paraeid="{a9890f65-bd09-43ce-b941-e232248f0c46}{133}"><span data-contrast="auto"> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p><span> </span></p> <p><span> </span></p> </div> </div> </div> <div> <span data-ccp-props="{'201341983':0,'335559740':259}" ></span></div> </div> </div> <div> <p paraid="739880928" paraeid="{6472d595-91b7-4440-89e9-890d4acd9c8e}{166}"><span data-contrast="none"> </span></p> </div> <p><span> </span></p> </div> <div> <p paraid="1053527918" paraeid="{f64664da-5092-46b8-866f-464e46bdf07a}{149}"><span data-ccp-props="{}"></span></p> </div> </div> </div> </div></div></div><div class="article-image"><img alt="11olh_cot1" src="https://www.home.saxo/-/media/content-hub/images/2024/march/11olh_cot1.png"/></div><div class="article-image"><img alt="11olh_cot2" src="https://www.home.saxo/-/media/content-hub/images/2024/march/11olh_cot2.png"/></div><div class="rte--output">Energy: For a second week, WTI was bought, and Brent sold, overall cutting the net long by 9k to 421k. The natural gas short was cut by 48% with distillates also exposed to long liquidation.</div><br/><div class="article-image"><img alt="11olh_cot3" src="https://www.home.saxo/-/media/content-hub/images/2024/march/11olh_cot3.png"/></div><div class="rte--output">Metals: Gold’s surge to a record was supported by a 93% jump in the fund long to 131k contracts, still below the Dec peak at 131k and the 2019 record high at 292k contracts. Silver flipped to a net long while flat trading copper flipped back to a net short </div><br/><div class="article-image"><img alt="11olh_cot4" src="https://www.home.saxo/-/media/content-hub/images/2024/march/11olh_cot4.png"/></div><div class="rte--output">Grains: selling resumed led by the soybeans complex in the process lifting the combined soy, corn and wheat net short back to near a record</div><br/><div class="article-image"><img alt="11olh_cot5" src="https://www.home.saxo/-/media/content-hub/images/2024/march/11olh_cot5.png"/></div><div class="rte--output">Softs: Cocoa selling extended to a sixth week albeit at a slowing pace as short covering from producers showed signs of running out of steam. Sugar length cut by 36% while continued cotton lifted the net long to near the 2021 high at 96.7k </div><br/><div class="article-image"><img alt="11olh_cot6" src="https://www.home.saxo/-/media/content-hub/images/2024/march/11olh_cot6.png"/></div><div class="rte--output">Forex: the non-commercial dollar long held steady with buying of EUR, GBP and not least the heavily shorted JPY being offset by selling of CHF, AUD and CAD. Ahead of the end of week rally, the JPY short had been cut by 10% from a 7-year high to -119k contracts (USD 10 billion equivalent) </div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>8 Mch 2024: <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---8-march-2024-08032024">Commodity weekly: Gold and silver steal the limelight</a><br /> 8 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/options/investing-with-options---gold-optionality-08032024"><strong><span>Investing with options - Gold optionality</span></strong></a></span><span><br /> 6 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/how-to-add-gold-exposure-to-your-portfolio-06032024"><strong><span>How to add gold exposure to your portfolio</span></strong></a></span><span><br /> 6 Mch 2024:&nbsp;</span><span><a rel="noopener noreferrer" href="https://www.youtube.com/watch?v=ShVBip5DmL0" target="_blank"><strong><span>Video: What happened to the gold prices?</span></strong></a></span><span><br /> 1 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-march-2024-01032024"><strong><span>Grains dip, cocoa soars, gold and oil see rays of strength: February&rsquo;s commodity mix</span></strong></a></span><span><br /> 29 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-29-feb-2024---commodities---why-speculative-interest-is-important-for-everyone-29022024"><strong><span>Podcast: Why speculative interest is important to understand</span></strong></a></span><span><br /> 28 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/oil-price-stuck-in-neutral-despite-underlying-strength-28022024"><strong><span>Oil price stuck in neutral despite underlying strength</span></strong></a></span><span><br /> 27 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/resilient-gold-market-defies-lower-rate-cut-predictions-27022024"><strong><span>Resilient gold market defies lower rate cut predictions</span></strong></a></span><span><br /> 22 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/copper-short-squeeze-fades-ahead-of-key-resistance-22022024"><strong><span>Copper short squeeze fades ahead of key resistance</span></strong></a></span><span><br /> 21 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/golds-resilience-despite-recent-etf-and-futures-selling-21022024"><strong><span>Gold's resilience despite recent futures and ETF selling</span></strong></a></span><span><br /> 20 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024"><strong><span>WTI crude eyes resistance amid improved signals</span></strong></a></span><span><br /> 16 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024"><strong><span>Commodity weekly: Grains tumble; Industrial metals eye China boost</span></strong></a></span><span><br /> 15 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024"><strong><span>US rate cut delay drives gold below $2000</span></strong></a></span><span><br /> 13 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a></span><span><br /> 7 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a></span><span><br /> 6 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a></span><span><br /> 2 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a></span><span><br /> 1 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a></span><span><br /> <strong><br /> <strong>Previous "Commitment of Traders" articles</strong></strong></span></p> <p><strong><span> <strong><span>4 Mch 2024:&nbsp;</span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---4-march-2024-04032024"><strong><span>COT: Underinvested speculators fuel gold's latest surge</span></strong></a><strong><span><br /> <strong>26 Feb 2024:&nbsp;</strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---26-feb-2024-26022024"><strong><span>COT:&nbsp;Record corn short, cocoa surge no longer supported by speculators</span></strong></a><strong><span><br /> <strong>19 Feb 2024:&nbsp;</strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024"><strong><span>COT: US inflation surprise drives broad selling of metals</span></strong></a><strong><span><br /> <strong>5 Feb 2024:</strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><strong><span><br /> </span></strong></span></strong><span><br /> </span></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>COT Commodities</span> <span>Crude Oil</span> <span>Natural Gas</span> <span>Gold</span> <span>Silver</span> <span>Copper</span> <span>Platinum</span> <span>Corn</span> <span>Sugar</span> <span>Coffee</span> <span>Gasoline</span> <span>Palladium</span> <span>Wheat</span> <span>Cocoa</span> <span>Cotton</span> <span>Cattle</span> <span>Energy (Sector)</span> <span>Forex</span> <span>COT FX</span> <span>EURUSD</span> <span>USDJPY</span> <span>AUDUSD</span> <span>USDCAD</span> <span>USDCHF</span> <span>GBPUSD</span> <span>NZDUSD</span> <span>Government Bonds</span> <span>Bonds nspiration</span> <a href="https://www.home.saxo/insights/news-and-research/bonds">Bonds</a> <a href="https://www.home.saxo/insights/news-and-research/forex">Forex</a> <span>En hurtig tanke</span></div>Mon, 11 Mar 2024 10:30:00 Z2024-03-27T10:51:49Z{DF72CA36-87BF-4AA6-9BDF-B976A0232DBC}https://www.home.saxo/content/articles/commodities/commodity-weekly---8-march-2024-08032024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal Reservecommodity-gas oilcommodity-crude oilcommodity-heating oilsector-Oil and GasOilcommodity-copperAgricultureplace-lc/cnHighlighted articlescommodity-wheatIron Orecommodity-natural gasCommodity weekly: Gold and silver steal the limelight<div class="article-excerpt">The commodities sector has started March on a firm footing with broad gains supporting the best weekly performance since October</div><div class="article-rte"><div class="rte--output"><span></span> <ul> <li><span>Commodities sector starts March with strong gains, marking best weekly performance since October.</span></li> <li><span>Supported by a softer dollar and lower Treasury yields after Powell's remarks on potential rate cuts</span></li> <li><span>Precious metals see significant gains with gold reaching record high while silver tops the performance table</span></li> <li><span>Wheat futures tumble to 3-1/2-year low amid increased competition and ample global supply.</span></li> <li><span>Stuck in range crude can't get a break&nbsp;</span></li> </ul> <p><span >The commodities sector has started March on a firm footing with broad gains supporting the best weekly performance since October, and while obesity drugs and AI continue to receive a lot of bandwidth in the stock market, this week in commodities belonged to precious metals, not least gold which was heading for its strongest two-week gain since July, in the process racing higher to reach a record high. Supported by a softer dollar and lower Treasury yields after Federal Reserve Chair Powell said the central bank is &ldquo;not far&rdquo; from having the confidence needed to ease policy and that rate cuts can and will begin this year.</span></p> <p><span>As mentioned, these remarks helped send the dollar broadly lower - and risk appetite broadly higher - not least the Japanese yen which got multiple boosts, which apart from a dovish Powell included a strong wage growth print which raised chances the Bank of Japan will finally exit the world&rsquo;s last remaining negative-rates regime and hike rates, perhaps as soon as this month. The USDJPY retreated and may have further to go as speculators reduce exposure to one the most favourite short trades in the past three years.</span></p> <p><span>As per the table below, all sectors except energy, traded higher on the week with broad gains seeing the Bloomberg Commodity Total Return Index trade back in black on the year. Despite all the focus on gold, silver was the top performer after enjoying a trifecta of support from rising gold and copper prices as well as the softer dollar.</span></p> <p><span>The Bloomberg Softs index remains the best performing sector this year, despite emerging signs of profit taking, not least cocoa which has witnessed a parabolic surge amid a substantial drop in supply from West Africa. However, with buying pressure from producers closing short positions, put in place to hedge exposure, starting to ease it was coffee and cotton&rsquo;s turn to shine. Arabica coffee futures enjoyed the tailwind from surging Robusta coffee futures which surged to a new high on mounting concerns over weak supplies from Vietnam and Indonesia, two of the world&rsquo;s top three producers.</span></p> <p><span> </span></p></div></div><div class="article-image"><img alt="8olh_wcu1" src="https://www.home.saxo/-/media/content-hub/images/2024/march/8olh_wcu1.png"/></div><div class="article-additional-rte"><div class="rte--output"><p><span> </span></p> <div> <h3 class="article-heading--3">Gold focus shifts to consolidation after record run</h3> <br /> In our latest weekly update, we mentioned how the gold market last month showed signs of strength, trading flat on the month despite seeing US Treasury yields shot higher after US data strength earlier in the month had further delayed the expected timing of the first and depth of subsequent US rate cuts. Towards the end of February, the yellow metal was increasingly behaving like a coiled spring, wanting to trade higher despite yield headwinds, but held back by worries about continued data strength. However, after an in-line US PCE core deflator print was followed by a weaker ISM manufacturing print, buyers threw caution to the wind and rushed into the yellow with momentum buying giving it additional strength once a key band of resistance, which is now support, between USD 2075 and USD 2088 were broken.<br /> <br /> <span >At the end of last year, we forecast gold could reach USD 2300 in 2024, so while the latest rally is in line with our general view on the direction of gold, we have been left surprised by the timing of the run up to a fresh record. Given the need for rate cuts to attract ETF investors back into gold we have been calling for patience regarding the timing of the next move higher. Without any participation from ETF investors who sold 9 tons this past week, the rally has primarily been driven by under-invested hedge funds forced back into the market as several key resistance levels got broken.</span> <p><span>Underlying support has for months been provided by central banks, some of which are buying gold in order to reduce their exposure to the dollar, and continued strong demand from retail investors in Asia, most notably in China where stock market weakness and falling property prices are forcing the middle class to look elsewhere. In addition, we believe that heightened geopolitical tensions around the world have reduced the short-selling appetite, basically all strengthening gold&rsquo;s current buy-on-dips credentials.</span></p> <p><span>Without a notable pickup in demand from investors in ETFs to pick up the baton from hedge funds that will soon reach their desired level of exposure, gold may hit a plateau followed by a period of nervous trading as recent established longs may reduce exposure. Overall, we maintain our USD 2300 target with the technical picture potentially pointing to an even higher level around USD 2500.</span></p> &nbsp;</div></div></div><div class="article-image"><img alt="8olh_wcu2a" src="https://www.home.saxo/-/media/content-hub/images/2024/march/8olh_wcu2a.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><p><strong><span>Top performing silver supported by gold and copper strength</span></strong><span>.</span></p> <p><span>Silver is the best performing commodity this past week after the semi-industrious metal on top of the tailwind from gold received an additional boost from industrial metal strength, not least copper which recorded its highest close for the year amid continued supply worries and demand optimism in China in the coming months, especially if the government announces measures to support metals intensive sectors like property and infrastructure. While gold has reached a fresh record, silver has yet to send a strong technical signal with another +5% move needed before challenging key resistance in the USD 26 area. </span></p> <p><span>Copper, rangebound since mid-2022, and the past nine months within a relatively narrow USD 3.50 to USD 4.00 range, is showing signs of fresh strength, supported by dollar softness, supply tightness, and China demand optimism. The weekly chart points to a breakout that needs a move through USD 4 to be confirmed.</span></p> <p><span> </span></p></div></div><div class="article-image"><img alt="8olh_wcu3" src="https://www.home.saxo/-/media/content-hub/images/2024/march/8olh_wcu3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>Wheat futures tumble to a 3-1/2-year low</span></h3> <p><span>Two years ago, this past week, the Chicago wheat futures reached an all-time high at USD 1363 per bushel after top exporter Russia invaded fellow supplier Ukraine, for a short period of timing throwing around 30% of global wheat exports into question. This week, the CBOT wheat futures contract tumbled to USD 528 per bushel, the lowest level since August 2020, thereby joining soybeans and corn, both of which in recent weeks had already slumped to 2020 lows. While soft commodities like cocoa, coffee, and cotton remain bid amid weather-related supply worries, the grains sector have suffered continued losses after a strong 2023/24 crop production season lifted global supply and with that competition for export orders.</span></p> <p><span>Competition is the key to wheat's current weakness as wheat prices the US and Europe are being forced lower by weaker prices in top exporter Russia. In addition to the current abundance of supply, Australia&rsquo;s output is expected to expand, while wetter weather is seen supporting US crops in the ground. However, in their monthly report on Friday, the US Department of Agriculture is expected to make small cuts to its forecast for US and world wheat stockpiles.</span></p> <p><span>Speculators have responded to months of weakness by continuing to increase short positions across the grains sector, recently resulting in a record short being held, primarily driven by corn and soybeans, with the current net short in wheat having seen a gradual reduction in recent weeks. However, as we approach the northern hemisphere planting and growing season, the attention will turn away from old stocks to new production prospects, and with that comes increased weather-related volatility.</span></p></div></div><div class="article-image"><img alt="8olh_wcu4" src="https://www.home.saxo/-/media/content-hub/images/2024/march/8olh_wcu4.png"/></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>Crude can&rsquo;t get a break</span></h3> <p><span>Crude oil&rsquo;s current lack of momentum continues to support our view that Brent and WTI will likely remain rangebound for a while longer, an outlook that was given additional credence this past week with WTI trading softer following several failed attempts to break above 80 while Brent has yet to challenge key resistance near USD 85. Overall, we see the risk of a breakout skewed slightly to the upside with focus on disruption risks in the Middle East and prolonged OPEC+ production restraint.</span></p> <p><span>Biggest short-term challenge potentially being the risk of selling from hedge funds scaling back exposure amid profit-taking in response to crude oil&rsquo;s current struggle to break higher. Especially after their net long in Brent and WTI futures reached a four-month high at 430,000 contracts or 430 million barrels.</span></p></div></div><div class="article-additional-rte"><div class="rte--output"><hr /> <strong></strong> <p><strong><span>Commodity articles:</span></strong></p> <p><span>8 Mch 2024: <a href="https://www.home.saxo/content/articles/options/investing-with-options---gold-optionality-08032024">Investing with options - Gold optionality</a><br /> 6 Mch 2024: <a href="https://www.home.saxo/content/articles/commodities/how-to-add-gold-exposure-to-your-portfolio-06032024">How to add gold exposure to your portfolio</a><br /> 6 Mch 2024:&nbsp;</span><a rel="noopener noreferrer" href="https://www.youtube.com/watch?v=ShVBip5DmL0" target="_blank"><strong><span>Video: What happened to the gold prices?</span></strong></a><span><br /> 1 Mch 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-march-2024-01032024"><strong><span>Grains dip, cocoa soars, gold and oil see rays of strength: February&rsquo;s commodity mix</span></strong></a><span><br /> 29 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-29-feb-2024---commodities---why-speculative-interest-is-important-for-everyone-29022024"><strong><span>Podcast: Why speculative interest is important to understand</span></strong></a><span><br /> 28 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/oil-price-stuck-in-neutral-despite-underlying-strength-28022024"><strong><span>Oil price stuck in neutral despite underlying strength</span></strong></a><span><br /> 27 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/resilient-gold-market-defies-lower-rate-cut-predictions-27022024"><strong><span>Resilient gold market defies lower rate cut predictions</span></strong></a><span><br /> 22 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/copper-short-squeeze-fades-ahead-of-key-resistance-22022024"><strong><span>Copper short squeeze fades ahead of key resistance</span></strong></a><span><br /> 21 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/golds-resilience-despite-recent-etf-and-futures-selling-21022024"><strong><span>Gold's resilience despite recent futures and ETF selling</span></strong></a><span><br /> 20 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024"><strong><span>WTI crude eyes resistance amid improved signals</span></strong></a><span><br /> 16 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024"><strong><span>Commodity weekly: Grains tumble; Industrial metals eye China boost</span></strong></a><span><br /> 15 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024"><strong><span>US rate cut delay drives gold below $2000</span></strong></a><span><br /> 13 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a><span><br /> 9 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a><span><br /> 9 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a><span><br /> 7 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a><span><br /> 6 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a><span><br /> 2 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a><span><br /> 1 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a><span><br /> <strong><br /> <strong>Previous "Commitment of Traders" articles</strong></strong></span></p> <p><strong><span> <strong><span>4 Mch 2024</span></strong><strong><span>:&nbsp;</span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---4-march-2024-04032024"><strong><span>COT: Underinvested speculators fuel gold's latest surge</span></strong></a><strong><span><br /> </span></strong><strong><span>26 Feb 2024</span></strong><strong><span>:&nbsp;</span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---26-feb-2024-26022024"><strong><span>COT:&nbsp;Record corn short, cocoa surge no longer supported by speculators</span></strong></a><strong><span><br /> </span></strong><strong><span>19 Feb 2024</span></strong><strong><span>:&nbsp;</span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024"><strong><span>COT: US inflation surprise drives broad selling of metals</span></strong></a><strong><span><br /> </span></strong><strong><span>5 Feb 2024:</span></strong><strong><span></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><strong><span><br /> </span></strong><strong><span>29 Jan 2024</span></strong><strong><span>:</span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024"><strong><span>&nbsp;COT: Squeeze risks after funds sold into rising commodity markets</span></strong></a><strong><span><br /> </span></strong><strong><span>22 Jan 2024:</span></strong><strong><span></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><strong><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></strong></a><strong><span><br /> </span></strong><strong><span>15 Jan 2024:</span></strong><strong><span></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><strong><span><br /> </span></strong><strong><span>8 Jan 2024:</span></strong><strong><span></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><strong><span><br /> <br /> </span></strong></span></strong><span><br /> </span></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Gas Oil</span> <span>Crude Oil</span> <span>Heating Oil</span> <span>Oil and Gas</span> <span>Oil</span> <span>Copper</span> <span>Agriculture</span> <span>China</span> <span>Highlighted articles</span> <span>Wheat</span> <span>Iron Ore</span> <span>Natural Gas</span></div>Fri, 08 Mar 2024 14:00:00 Z2024-03-27T10:51:46Z{B537D7BC-9BD6-4644-A04E-A272AD2DECE1}https://www.home.saxo/content/articles/commodities/how-to-add-gold-exposure-to-your-portfolio-06032024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal ReserveMiningFocus InflationWeekly NewsletterHow to add gold exposure to your portfolio<div class="article-excerpt">Gold has just reached a record high thereby supporting continued interest in a metal that against the odds have performed strongly in recent months. </div><div class="article-rte"><div class="rte--output"><div> <p><span>After a remarkably resilient February, during which gold managed to hold steady despite headwinds from a strengthening dollar, rising bond yields, and tempered rate cut expectations, the yellow metal has surged higher with XAUUSD reaching a fresh record high above USD 2140. Despite its current lofty levels, which some may feel is too much too soon, the prospect of future US interest rate cuts potentially starting a second leg higher can not be ruled out. Rate cuts when they occur, may drive investors back into ETF's, an asset class that has seen significant selling since 2022 when the US Federal Reserve embarked on its aggressive rate hike campaign. In addition sustained central bank and retail demand for physical gold, and ongoing geopolitical uncertainty are likely to continue providing underlying support to prices.</span></p> </div> <p><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <div> <div> <h3><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="5olh_gold3" src="https://www.home.saxo/-/media/content-hub/images/2024/march/5olh_gold3.png"/></div><div class="rte--output">Gold returns in different currencies</div><br/><div class="article-additional-rte"><div class="rte--output"><span data-contrast="auto"><a href="https://www.saxotrader.com/sim/instant-demo/InstantDemo-EN-GL/page/product/FxSpot/8177?activeTab=overview&amp;cmpid=copy_link_platform_sharing"></a></span> <div> <div> <h3 class="article-heading--3"><span>How to invest/trade gold</span><span>:</span></h3> <p><strong><span>Physical gold</span></strong><span>: Purchasing physical gold in the form of jewellery, coins, or bars provides direct exposure to the metal but involves considerations such as secure storage, insurance, and higher trading costs.</span></p> <p><strong><span>Gold ETFs/ETCs</span></strong><span>: Exchange-traded funds or commodities offer a convenient way to invest in gold without holding physical metal. These products track gold prices closely and can be traded easily on exchanges. </span></p> <h3 paraid="1033937941" paraeid="{40b2c94f-ca78-4b98-88a6-b55cc697fffa}{234}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <div> <p paraid="1425391661" paraeid="{7ae875e5-8831-4f3d-9c4d-e0eec23f9053}{112}"><span data-ccp-props="{'134233117':false,'134233118':false,'335559738':0,'335559739':0}"></span></p> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></div></div><div class="article-image"><img alt="5olh_gold1" src="https://www.home.saxo/-/media/content-hub/images/2024/march/5olh_gold1.png"/></div><div class="rte--output">During the past five years, the performance gap between physical gold and the ETC is around 1.5%, most of which can be explained by the fee charged by the ETC provider.</div><br/><div class="article-additional-rte"><div class="rte--output"><p><strong><span>Gold mining stocks/ETFs: </span></strong><span>Investing in gold mining companies or ETFs that hold a basket of mining stocks provides exposure to gold prices. However, these investments carry operational risks and may exhibit higher volatility compared to gold itself.&nbsp;</span><span >Since 2022, when the US Federal Reserve began hiking rates to curb soaring inflation, gold miners have struggled relative to the price of gold amid rising costs towards financing, labour, and materials. The weakness seen during the past few months has left the sector increasingly undervalued relative to the gold prices hitting fresh record closing highs.</span></p></div></div><div class="article-image"><img alt="5olh_gold5" src="https://www.home.saxo/-/media/content-hub/images/2024/march/5olh_gold5.png"/></div><div class="article-additional-rte"><div class="rte--output"><p><strong><span>Gold futures, CFDs, and options: </span></strong><span>Trading gold futures, contracts for difference (CFDs), or options involves higher risk due to leverage. While these products offer opportunities for speculation, they also require careful risk management to mitigate potential losses.<strong> </strong></span></p> <p><span>The COMEX gold futures has a contract size of 100 troy ounces, and with a current price around USD 2,100 per ounce, a contract value of USD 210,000. Being a leveraged product, the buyer or seller of a futures contract has to provide less than USD 10,000 as collateral, leaving the owner of the position highly exposed to losses without proper risk management. CFDs track the futures price with the main difference being the ability to trade smaller quantities than the 100-ounce futures contract.</span></p> <p><strong><span>Spot gold trading</span></strong><span>: another leveraged product that may suit traders using risk management tools while long-term investors may find ETFs being the better option. At Saxo you can use leverage to trade on the price of gold against 12 different currencies &ndash; including US dollar, euro, yuan and Swiss Franc &ndash; and silver.<br /> </span></p> <h3 class="article-heading--3"><span>Which factors drive gold?</span></h3> <p><strong><span>Monetary policy</span></strong><span>: The policies of the US Federal Reserve, including interest rates and inflation targets, significantly influence gold prices. As gold does not yield interest, rising interest rates increase the opportunity cost of holding gold, often leading asset managers to reduce their exposure to real assets. </span></p> <p><strong><span>Currency fluctuations</span></strong><span>: Gold prices typically exhibit an inverse relationship with the value of the US dollar. A weaker dollar tends to drive gold prices higher, and conversely, a stronger dollar can suppress gold prices.</span></p> <p><strong><span>Real bond yields</span></strong><span>: Gold prices often move inversely to interest rates, as rising rates increase the opportunity cost of holding non-interest-bearing assets like gold. Long-term investors monitor developments in US real yields, which represent the yield on a bond investment adjusted for expected inflation.</span></p> <p><strong><span>Central bank demand</span></strong><span>: Several central banks have been acquiring gold in recent years to diversify their reserves away from heavy reliance on the dollar. Additionally, gold's lack of credit or counterpart risk makes it a trusted reserve asset globally.</span></p> <p><strong><span>Geopolitical tensions</span></strong><span>: Gold is considered a safe-haven asset, sought by investors during times of geopolitical uncertainty or crisis due to its intrinsic value and perceived stability.</span></p> <p><strong><span>Speculative activity</span></strong><span>: Hedge funds and speculators often anticipate and amplify price movements in gold markets based on fundamental and momentum-driven factors. </span></p> <br /></div></div><div class="article-additional-rte"><div class="rte--output"><hr /> <strong></strong> <p><strong><span>Commodity articles:</span></strong></p> <p><span>6 Mch 2024:&nbsp;<a rel="noopener noreferrer" href="https://www.youtube.com/watch?v=ShVBip5DmL0" target="_blank"><strong><span>Video: What happened to the gold prices?</span></strong></a><br /> 1 Mch 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-march-2024-01032024"><strong><span>Grains dip, cocoa soars, gold and oil see rays of strength: February&rsquo;s commodity mix</span></strong></a></span><span><br /> 29 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-29-feb-2024---commodities---why-speculative-interest-is-important-for-everyone-29022024"><strong><span>Podcast: Why speculative interest is important to understand</span></strong></a></span><span><br /> 28 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/oil-price-stuck-in-neutral-despite-underlying-strength-28022024"><strong><span>Oil price stuck in neutral despite underlying strength</span></strong></a></span><span><br /> 27 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/resilient-gold-market-defies-lower-rate-cut-predictions-27022024"><strong><span>Resilient gold market defies lower rate cut predictions</span></strong></a></span><span><br /> 22 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/copper-short-squeeze-fades-ahead-of-key-resistance-22022024"><strong><span>Copper short squeeze fades ahead of key resistance</span></strong></a></span><span><br /> 21 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/golds-resilience-despite-recent-etf-and-futures-selling-21022024"><strong><span>Gold's resilience despite recent futures and ETF selling</span></strong></a></span><span><br /> 20 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024"><strong><span>WTI crude eyes resistance amid improved signals</span></strong></a></span><span><br /> 16 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024"><strong><span>Commodity weekly: Grains tumble; Industrial metals eye China boost</span></strong></a></span><span><br /> 15 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024"><strong><span>US rate cut delay drives gold below $2000</span></strong></a></span><span><br /> 13 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a></span><span><br /> 7 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a></span><span><br /> 6 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a></span><span><br /> 2 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a></span><span><br /> 1 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a></span><span><br /> <strong><br /> <strong><span>Previous "Commitment of Traders" articles</span></strong></strong></span></p> <p><strong><span>4 Mch 2024</span></strong><strong><span>:&nbsp;</span></strong><strong><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---4-march-2024-04032024"><span>COT: Underinvested speculators fuel gold's latest surge</span></a></span></strong><strong><span><br /> </span></strong><strong><span>26 Feb 2024</span></strong><strong><span>:&nbsp;</span></strong><strong><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---26-feb-2024-26022024"><span>COT:&nbsp;Record corn short, cocoa surge no longer supported by speculators</span></a></span></strong><strong><span><br /> </span></strong><strong><span>19 Feb 2024</span></strong><strong><span>:&nbsp;</span></strong><strong><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024"><span>COT: US inflation surprise drives broad selling of metals</span></a></span></strong><strong><span><br /> </span></strong><strong><span>5 Feb 2024:</span></strong><strong><span></span></strong><strong><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><span>COT: Speculators chase false crude break; grain short extends further</span></a></span></strong><strong><span><br /> </span></strong><strong><span>29 Jan 2024</span></strong><strong><span>:</span></strong><strong><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024"><span>&nbsp;COT: Squeeze risks after funds sold into rising commodity markets</span></a></span></strong><strong><span><br /> </span></strong><strong><span>22 Jan 2024:</span></strong><strong><span></span></strong><strong><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></a></span></strong><strong><span><br /> </span></strong><strong><span>15 Jan 2024:</span></strong><strong><span></span></strong><strong><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></a></span></strong><strong><span><br /> </span></strong><strong><span>8 Jan 2024:</span></strong><strong><span></span></strong><strong><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><span>COT: Weakest commodities conviction since 2015</span></a></span></strong><strong><span><br /> <br /> </span></strong></p> <p><strong><span> <br /> </span></strong></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Mining</span> <span>Focus Inflation</span> <span>Weekly Newsletter</span></div>Wed, 06 Mar 2024 10:00:00 Z2024-03-27T10:51:47Z{787B57A0-FBBF-457C-B131-616D77F15956}https://www.home.saxo/content/articles/commodities/gold-is-on-the-rise-06032024Ole Hansenproduct-commoditiesHighlighted articlescommodity-goldIs gold ready to rip?<div class="article-excerpt">Will 2024 be the year of the metals? Gold has just reached a fresh record high driven by strong retail demand and record central bank buying. With the prospect for rate cuts in the US later this year, further strength could lie ahead.</div><div class="article-rte"><div class="rte--output"><h3>How to invest/trade gold:</h3> <p><span><strong>Physical gold</strong></span><strong>:</strong> Purchasing physical gold in the form of jewellery, coins, or bars provides direct exposure to the metal but involves considerations such as secure storage, insurance, and higher trading costs.</p> <p><span><strong>Gold ETFs/ETCs</strong></span>: Exchange-traded funds or commodities offer a convenient way to invest in gold without holding physical metal. These products track gold prices closely and can be traded easily on exchanges.<br /> <br /> <span><strong>Gold mining stocks/ETFs:&nbsp;</strong></span>Investing in gold mining companies or ETFs that hold a basket of mining stocks provides exposure to gold prices. However, these investments carry operational risks and may exhibit higher volatility compared to gold itself.&nbsp;<span>Since 2022, when the US Federal Reserve began hiking rates to curb soaring inflation, gold miners have struggled relative to the price of gold amid rising costs towards financing, labour, and materials. The weakness seen during the past few months has left the sector increasingly undervalued relative to the gold prices hitting fresh record closing highs.<br /> </span><span ><br /> <strong>Gold futures, CFDs, and options:</strong>&nbsp;</span><span >Trading gold futures, contracts for difference (CFDs), or options involves higher risk due to leverage. While these products offer opportunities for speculation, they also require careful risk management to mitigate potential losses.</span><span><br /> </span></p> <p>The COMEX gold futures has a contract size of 100 troy ounces, and with a current price around USD 2,100 per ounce, a contract value of USD 210,000. Being a leveraged product, the buyer or seller of a futures contract has to provide less than USD 10,000 as collateral, leaving the owner of the position highly exposed to losses without proper risk management. CFDs track the futures price with the main difference being the ability to trade smaller quantities than the 100-ounce futures contract.</p> <p><span><strong>Spot gold trading</strong></span><strong>: </strong>another leveraged product that may suit traders using risk management tools while long-term investors may find ETFs being the better option. At Saxo you can use leverage to trade on the price of gold against 12 different currencies &ndash; including US dollar, euro, yuan and Swiss Franc &ndash; and silver.</p> <h3>Which factors drive gold?</h3> <p><span><strong>Monetary policy</strong></span><strong>:</strong> The policies of the US Federal Reserve, including interest rates and inflation targets, significantly influence gold prices. As gold does not yield interest, rising interest rates increase the opportunity cost of holding gold, often leading asset managers to reduce their exposure to real assets.</p> <p><span><strong>Currency fluctuations</strong></span><strong>: </strong>Gold prices typically exhibit an inverse relationship with the value of the US dollar. A weaker dollar tends to drive gold prices higher, and conversely, a stronger dollar can suppress gold prices.</p> <p><span><strong>Real bond yields</strong></span><strong>: </strong>Gold prices often move inversely to interest rates, as rising rates increase the opportunity cost of holding non-interest-bearing assets like gold. Long-term investors monitor developments in US real yields, which represent the yield on a bond investment adjusted for expected inflation.</p> <p><span><strong>Central bank demand</strong></span><strong>:</strong> Several central banks have been acquiring gold in recent years to diversify their reserves away from heavy reliance on the dollar. Additionally, gold's lack of credit or counterpart risk makes it a trusted reserve asset globally.</p> <p><span><strong>Geopolitical tensions</strong></span><strong>: </strong>Gold is considered a safe-haven asset, sought by investors during times of geopolitical uncertainty or crisis due to its intrinsic value and perceived stability.</p> <p><span><strong>Speculative activity</strong></span><strong>: </strong>Hedge funds and speculators often anticipate and amplify price movements in gold markets based on fundamental and momentum-driven factors.</p></div></div><div class="article-video"><iframe title="" src="//saxobank.23video.com/13846859.ihtml/player.html?source=embed&photo_id=95371711"></iframe></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Highlighted articles</span> <span>Gold</span></div>Wed, 06 Mar 2024 09:34:00 Z2024-03-07T08:12:26Z{94BBC51D-14E5-41FB-A3EB-C6B889757FE0}https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---4-march-2024-04032024Ole Hansenproduct-commoditiesCOT Commoditiescommodity-crude oilcommodity-natural gascommodity-goldcommodity-silvercommodity-coppercommodity-platinumcommodity-corncommodity-sugarcommodity-coffeecommodity-gasolinecommodity-palladiumcommodity-wheatcommodity-cocoacommodity-cottoncommodity-cattlesector-gics-1010product-forexCOT FXforex-eurusdforex-usdjpyforex-audusdforex-usdcadforex-usdchfforex-gbpusdforex-nzdusdsubject-is/fin.stpbondBonds Inspirationproduct-bondsproduct-forexEn hurtig tankeCOT: Underinvested speculators fuel gold's latest surge<div class="article-excerpt">Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to last Tuesday, February 27</div><div class="article-rte"><div class="rte--output"><em>Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities while in forex we use the broader measure called non-commercial.</em></div></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>What is the Commitments of Traders report?</span></h3> <p>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.</p> <p>Commodities: Producer/Merchant/Processor/User, Swap dealers,&nbsp;<span>Managed Money</span>&nbsp;and other<br /> Financials: Dealer/Intermediary; Asset Manager/Institutional;&nbsp;<span>Leveraged Funds</span>&nbsp;and other<br /> Forex: A broad breakdown between commercial and&nbsp;<span>non-commercial</span>&nbsp;(speculators)</p> <p>The main reasons why we focus primarily on the behavior of speculators, such as hedge funds and trend-following CTA's are:</p> <ul> <li>They are likely to have&nbsp;<span>tight stops</span>&nbsp;and&nbsp;<span>no underlying exposure</span>&nbsp;that is being hedged</li> <li>This makes them&nbsp;<span>most reactive to changes</span>&nbsp;in fundamental or technical price developments</li> <li>It provides views about&nbsp;<span>major trends</span>&nbsp;but also helps to decipher when a&nbsp;<span>reversal</span>&nbsp;is looming</li> </ul> <p>Do note that&nbsp;<span >this group tends to <strong>anticipate, accelerate, and amplify</strong> price changes that have been set in motion by <strong>fundamentals</strong>. Being followers of momentum, this strategy often sees this group of traders buy into strength and sell into weakness, meaning that they are often found holding the biggest long near the peak of a cycle or the biggest short position ahead of a through in the market.<br /> </span></p> <hr /></div></div><div class="article-additional-rte"><div class="rte--output"><span></span> <div> <span></span> <span></span> <div> <span></span> <div> <div> <div> <div> <div> <div> <div> <span></span> <div> <div> <span data-contrast="none"></span><span></span> <div> <span data-contrast="none"></span> <div> <span data-contrast="none"></span> <div> <span></span> <span></span> <div> <span></span> <div><span></span><span>This summary highlights futures positions and changes made by hedge funds across commodities and forex in the week to last Tuesday, February 27. A week that saw global equity markets continue higher while other markets traded mixed with bond yields trading higher and the dollar lower ahead of Thursday&rsquo;s long-awaited US PCE core deflator print, the Fed&rsquo;s preferred inflation gauge. Commodities meanwhile found a bid with energy, industrial metals and softs offsetting some weakness in precious metals and grains.</span>&nbsp;<br /> <br /> <div> <h3 class="article-heading--3">Commodities: </h3> <p>The Bloomberg Commodity Index, which tracks a basket of 24 major futures markets split between energy (30.1%), metals (34.2%) and agriculture (35.7%), managed to reverse losses seen the previous week with broad energy gains, led by natural gas (+10%) and WTI (2.4%) and pockets of strength in wheat, softs and livestock offsetting weakness across precious metals.</p> <p>On an individual level, hedge funds turned net buyers of WTI crude, natural gas, copper, corn, wheat and cotton, partly offset by net selling in Brent, silver, platinum, soybeans, cocoa and coffee.</p> &nbsp;</div> <div> <p paraid="196724374" paraeid="{b97640b3-da69-4c4a-9e0a-484912101cb3}{166}"><span ></span></p> </div> <div> <p paraid="1951631753" paraeid="{db890906-2cbf-41d3-a1d1-41a0a15275d4}{57}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div> </div> <div> <p paraid="1815481085" paraeid="{9dc17bdc-2b11-4bfd-b9b9-624ec6b0c42a}{183}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div> </div> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}" ></span></div> </div> <p paraid="1396398248" paraeid="{a9890f65-bd09-43ce-b941-e232248f0c46}{133}"><span data-contrast="auto"> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p><span> </span></p> <p><span> </span></p> </div> </div> </div> <div> <span data-ccp-props="{'201341983':0,'335559740':259}" ></span></div> </div> </div> <div> <p paraid="739880928" paraeid="{6472d595-91b7-4440-89e9-890d4acd9c8e}{166}"><span data-contrast="none"> </span></p> </div> <p><span> </span></p> </div> <div> <p paraid="1053527918" paraeid="{f64664da-5092-46b8-866f-464e46bdf07a}{149}"><span data-ccp-props="{}"></span></p> </div> </div> </div> </div></div></div><div class="article-image"><img alt="4olh_cot1" src="https://www.home.saxo/-/media/content-hub/images/2024/march/4olh_cot1.png"/></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3">What&rsquo;s next after gold hits record closing high</h3> <p>In our latest <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-march-2024-01032024">commodity weekly</a>, we highlighted gold&rsquo;s resilience during February when the yellow metal ended up unchanged on the month despite the negative pull from a stronger dollar and rising bond yields, after rate cut expectations deflated with the first cut being delayed until June or later. Furthermore, so-called &lsquo;paper&rsquo; gold investors in ETFs and futures have so far this year been net sellers of gold, in ETFs by around 100 tons while speculators in the futures market have halved their net long after selling around 190 tons. We also reiterated our patient stance regarding the timing of the next move higher towards and beyond the December 4 records at USD 2,135 in spot and USD 2,152 in COMEX futures.</p> <p>Ahead of last Thursday&rsquo;s long-awaited US PCE core deflator print, the Fed&rsquo;s preferred inflation gauge, gold had behaved like a coiled spring, wanting to trade higher despite yield headwinds, but held back by worries about an inflation surprise. However, with the number in line with expectations, gold started a move that accelerated on Friday when the yellow metal reached the December 28 high at USD 2,088, before closing at a record USD 2,082.90. This after a weaker ISM manufacturing and the revision to University of Michigan sentiment numbers garnered a dovish reaction, sending yields and the dollar lower.</p> <p>Overall, these developments point to a continued strong underlying physical demand from central banks and retail buyers in Asia. In addition, we believe that heightened geopolitical tensions around the world have reduced the short-selling appetite, basically all strengthening gold&rsquo;s current buy-on-dips credentials.<br /> <br /> Our short- to medium-term technical outlook for gold can be found <a href="https://www.home.saxo/content/articles/commodities/technical-analysis-gold-broken-resistance-new-all-time-high-likely-04032024">here</a></p></div></div><div class="article-image"><img alt="4olh_cot0" src="https://www.home.saxo/-/media/content-hub/images/2024/march/4olh_cot0.png"/></div><div class="rte--output">Gold's small year-to-date gain has occured during a period of multiple headwinds from a stronger dollar to sharply higher bond yields and lower US rate expectations. Adding to this a 100 tons outflow from ETFs and near 200 tons of hedge fund selling via futures</div><br/><div class="article-image"><img alt="4olh_cot2" src="https://www.home.saxo/-/media/content-hub/images/2024/march/4olh_cot2.png"/></div><div class="rte--output">Energy: Buying of WTI (+41k) and selling of Brent (-17.5k) lifted the combined net long to 430k, a four-month high while a 10% jump (Chesapeake production cut announcement) helped drive a 30% reduction in the net short</div><br/><div class="article-image"><img alt="4olh_cot3" src="https://www.home.saxo/-/media/content-hub/images/2024/march/4olh_cot3.png"/></div><div class="rte--output">Metals: A small 6% increase in the gold long to 68k left speculators unprepared for the end of week price spike. Even more so in silver where they flipped their position back to a 9.5k net short. Copper buying saw the return of a net long for the first time in eight weeks.</div><br/><div class="article-image"><img alt="4olh_cot4" src="https://www.home.saxo/-/media/content-hub/images/2024/march/4olh_cot4.png"/></div><div class="rte--output">Grains: In corn, non-stop selling since December finally paused with short covering demand emerging after the net short hit a record in the previous week. Overall, the grains sector saw a small 17k net increase with the buying of wheat offsetting another extension of the soybean short to near a five-year high.</div><br/><div class="article-image"><img alt="4olh_cot5" src="https://www.home.saxo/-/media/content-hub/images/2024/march/4olh_cot5.png"/></div><div class="rte--output">Softs: Long liquidation from speculators continued as the net long slumped to an 11-month low. Once again highlighting the recent parabolic rise being driven by producers unwinding short positions (hedges). Weeks of non-stop buying lifted the cotton long to an October 2021 high.</div><br/><div class="article-image"><img alt="4olh_cot6" src="https://www.home.saxo/-/media/content-hub/images/2024/march/4olh_cot6.png"/></div><div class="rte--output">Forex: The non-commercial dollar long vs 8 IMM futures and the dollar index reached a three-month high at USD 2.7bn, driven by selling of EUR, JPY and CHF and only partly offset by small demand for AUD and NZD</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>1 Mch 2024: <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-march-2024-01032024">Grains dip, cocoa soars, gold and oil see rays of strength: February&rsquo;s commodity mix</a><br /> 29 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-29-feb-2024---commodities---why-speculative-interest-is-important-for-everyone-29022024"><strong><span>Podcast: Why speculative interest is important to understand</span></strong></a></span><span><br /> 28 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/oil-price-stuck-in-neutral-despite-underlying-strength-28022024"><strong><span>Oil price stuck in neutral despite underlying strength</span></strong></a></span><span><br /> 27 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/resilient-gold-market-defies-lower-rate-cut-predictions-27022024"><strong><span>Resilient gold market defies lower rate cut predictions</span></strong></a></span><span><br /> 22 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/copper-short-squeeze-fades-ahead-of-key-resistance-22022024"><strong><span>Copper short squeeze fades ahead of key resistance</span></strong></a></span><span><br /> 21 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/golds-resilience-despite-recent-etf-and-futures-selling-21022024"><strong><span>Gold's resilience despite recent futures and ETF selling</span></strong></a></span><span><br /> 20 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024"><strong><span>WTI crude eyes resistance amid improved signals</span></strong></a></span><span><br /> 16 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024"><strong><span>Commodity weekly: Grains tumble; Industrial metals eye China boost</span></strong></a></span><span><br /> 15 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024"><strong><span>US rate cut delay drives gold below $2000</span></strong></a></span><span><br /> 13 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a></span><span><br /> 7 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a></span><span><br /> 6 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a></span><span><br /> 2 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a></span><span><br /> 1 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a></span><span><br /> </span><span><br /> <strong><strong><span>Previous "Commitment of Traders" articles</span></strong></strong></span></p> <p><span>26 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---26-feb-2024-26022024"><strong><span>COT:&nbsp;Record corn short, cocoa surge no longer supported by speculators</span></strong></a><span><br /> 19 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024"><strong><span>COT: US inflation surprise drives broad selling of metals</span></strong></a><span><br /> 5 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><span><br /> 29 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024"><strong><span>&nbsp;COT: Squeeze risks after funds sold into rising commodity markets</span></strong></a><span><br /> 22 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><strong><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></strong></a><span><br /> 15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><span><br /> </span></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>COT Commodities</span> <span>Crude Oil</span> <span>Natural Gas</span> <span>Gold</span> <span>Silver</span> <span>Copper</span> <span>Platinum</span> <span>Corn</span> <span>Sugar</span> <span>Coffee</span> <span>Gasoline</span> <span>Palladium</span> <span>Wheat</span> <span>Cocoa</span> <span>Cotton</span> <span>Cattle</span> <span>Energy (Sector)</span> <span>Forex</span> <span>COT FX</span> <span>EURUSD</span> <span>USDJPY</span> <span>AUDUSD</span> <span>USDCAD</span> <span>USDCHF</span> <span>GBPUSD</span> <span>NZDUSD</span> <span>Government Bonds</span> <span>Bonds nspiration</span> <a href="https://www.home.saxo/insights/news-and-research/bonds">Bonds</a> <a href="https://www.home.saxo/insights/news-and-research/forex">Forex</a> <span>En hurtig tanke</span></div>Mon, 04 Mar 2024 11:30:00 Z2024-03-27T10:51:49Z{8E5CC7B0-C405-492A-A96C-5F2AA82634BB}https://www.home.saxo/content/articles/commodities/commodity-weekly---1-march-2024-01032024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal Reservecommodity-gas oilcommodity-crude oilcommodity-heating oilsector-Oil and GasOilcommodity-copperAgricultureplace-lc/cnHighlighted articlescommodity-wheatIron Orecommodity-natural gasGrains dip, cocoa soars, gold and oil see rays of strength: February’s commodity mix<div class="article-excerpt">Commodities saw a broad albeit moderate decline last month, led by grains hitting a three-year low while cocoa surged by one-third. Precious metals and crude oil showed signs of underlying strength during a month that saw Treasury yields surge and the dollar strengthen</div><div class="article-rte"><div class="rte--output"><span></span> <p><span>Commodities suffered a broad albeit moderate setback last month with all sectors trading lower, primarily led by a third monthly decline in grains after the sector hit a three-year low amid ample supply, in the process driving the speculative short position to a record high. Overall, the Bloomberg Commodity Total Return index (BCOM), which tracks a basket of 24 major commodity futures almost evenly split between energy, metals, and agriculture, traded 1.5% lower, a fourth monthly decline.</span></p> <p><span>The table below shows the performance across several commodity futures, some of which are not members of the BCOM index. Examples include cocoa which surged higher by one-third, recording its biggest monthly gain in 22 years, as the supply crisis in West Africa continued to cause havoc across the chocolate industry. At the bottom of the table, we find EU natural gas suffering further losses amid ample supply and mild end-of-winter weather, and partly linked to that, the ECX emission contract which slumped near to a three-year low &ndash; and more than halving from last year&rsquo;s peak. Staying with the energy theme, it&rsquo;s worth noting that without the notoriously volatile US natural gas contract, which slumped to a near four-year low, the BCOM index loss would have been less than one percent with crude oil and fuel products all trading higher amid emerging signs of underlying strength</span></p> <p><span>Elsewhere, it was a relatively quiet month across the metals space with industrial and precious metals both suffering small declines, a relatively decent performance during a month where China economic data continued to disappoint while US Treasury yields shot higher after US data strength further delayed the expected timing of the first and depth of subsequent US rate cuts.</span></p> <p><span> </span></p></div></div><div class="article-image"><img alt="1olh_wcu1" src="https://www.home.saxo/-/media/content-hub/images/2024/march/1olh_wcu1.png"/></div><div class="article-additional-rte"><div class="rte--output"><p><span> </span></p> <div> <h3 class="article-heading--3"><span>EU emissions and green transformation industry continue to suffer</span></h3> <p><span>Wall Street reached new record highs last month and, not surprisingly given the current AI hype and focus on defence, Saxo&rsquo;s equity theme baskets show strong year-to-date gains for defence and semiconductors, followed by mega caps and cybersecurity. At the bottom of the table, we find four baskets that include companies involved with commodities and the green transformation.</span></p> <p><span>During the past year, with surging funding costs and the recent prospect of rates not being reduced at the same pace as previously thought, the capital-intensive industries involved with developing solutions within the green transformation, renewable energy, and energy storage have all suffered steep declines. Besides high funding costs, these industries have also suffered from a steep decline in natural gas prices which have raised the relative cost of developing alternative solutions.<br /> <br /> Saxo's equity themes, and the underlying stocks in the mentioned themes can be found here for<a rel="noopener noreferrer" href="https://social.saxo/qulay0b?uuid=tNsy6dO" target="_blank"> defence</a>, <a rel="noopener noreferrer" href="https://social.saxo/uwxvovo?uuid=tNsy6dO" target="_blank">semiconductors</a>, <a rel="noopener noreferrer" href="https://social.saxo/nhcmcs2?uuid=tNsy6dO" target="_blank">commodities</a>, <a rel="noopener noreferrer" href="https://social.saxo/tuhx3ow?uuid=tNsy6dO" target="_blank">green transformation</a>,<a rel="noopener noreferrer" href="https://social.saxo/t0jtylh?uuid=tNsy6dO" target="_blank"> renewable energy</a> and<a rel="noopener noreferrer" href="https://social.saxo/cteoysw?uuid=tNsy6dO" target="_blank"> energy storage</a>&nbsp;</span></p> </div></div></div><div class="article-image"><img alt="1olh_wcu2" src="https://www.home.saxo/-/media/content-hub/images/2024/march/1olh_wcu2.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><p><span>Related to this, another market that has suffered steep declines in recent months has been the cost of buying carbon offsets in Europe with the ECX emission contract at one point slumping to near EUR 50 per tons, down from EUR 105 this time last year. The collapse in the cost for paying to pollute has partly been driven by the fact that the European power network is cleaning up so fast it's destroying demand for carbon permits. The massive rollout of solar and wind farms across the EU during the past couple of years, and the recovery in nuclear power generation in France combined with lower industrial activity topped up with a mild winter all driving natural gas prices sharply lower have reduced demand for higher polluting coal.</span></p> <p><span>The energy transformation and focus on combating harmful emissions had, up until last year, supported sharply higher emission prices and with that driven a speculative long bubble with traders/speculators believing it could only go up. Having almost halved in value during the past year, that speculative bubble has burst, thereby reducing the selling pressure. Overall, however, the prospect for a recovery depends on economic activity and whether we see a revival among the heavy energy-consuming industries that were hurt during last year&rsquo;s gas price surge. With the market for emission allowances set to tighten significantly later this decade &ndash; as more industry groups will have to buy permissions &ndash; a floor will eventually be found, but whether that floor is above EUR 50 remains to be seen and will, among other factors, depend on whether Europe can avoid a prolonged economic slowdown.</span></p></div></div><div class="article-image"><img alt="1olh_wcu3" src="https://www.home.saxo/-/media/content-hub/images/2024/march/1olh_wcu3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>Speculators no longer to blame for ongoing cocoa surge</span></h3> <p><span>Cocoa futures extended their parabolic surge last month, rising more than one-third to record the biggest monthly jump in 22 years. The rally which gathered momentum late last year has seen the futures price in New York surge to a record high above USD 6000 per ton, around 2.5 times higher than the five-year average seen prior to 2023. This was driven by a worse-than-expected deficit in 2023-24 &ndash; the third in a row &ndash; due to adverse developments in West Africa, the world&rsquo;s top producing region, accounting for around 75% of global production. Heavy rains earlier in the season hurt crops and spread disease before ageing trees had to contend with heat and dryness. All these developments contributed to lowering output and with small-lot farmers not reaping the economic award, they will continue to struggle affording much needed but expensive pesticides and fertilizers to combat diseases while maintaining production from ageing trees.&nbsp; </span></p> <p><span>Arrivals of bags from cocoa farmers to ports in Ivory Coast, the number one shipper, are currently down around one-third on last year, and with the mid-season crop after March now also looking challenged, it has raised concerns about the availability of cocoa to meet already agreed sales obligations, potentially leaving some of the major chocolate producers short changed, forcing them to enter the futures market to secure supplies, inadvertently turning into buyers of futures instead of normal selling (hedging) activity. Looking at the weekly </span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---26-feb-2024-26022024">Commitment of Traders</a></span><span> data, we find that producers are increasingly the main buyers as they cut short positions while hedge funds have been net sellers for several weeks, in the process cutting their net long to an 11-month low.&nbsp; </span></p> <h3 class="article-heading--3"><span>Gold&rsquo;s coiled spring behaviour</span></h3> <p><span>We maintain a bullish outlook for gold and silver, but as we have highlighted on several occasions in recent months, both metals are likely to push significantly higher until we get a better understanding about the delivery of future US rate cuts. Until the first cut is delivered, the market may at times run ahead of itself, in the process building up rate cut expectations to levels that leave prices vulnerable to a correction. With that in mind, the short-term direction of gold and silver will continue to be dictated by incoming economic data and their impact on the dollar, yields and not least rate cut expectations.</span></p> <p><span>One key focus remains the short-term rates market which has gone from pricing in more than six 25 basis points US rate cuts this year to less than four, while bets on the timing of the first cut have moved out to June, potentially leaving a very narrow window available for the remainder of these cuts. This assumes that the FOMC is unlikely to cut rates near the November US Presidential election in order to avoid being accused of showing favouritism towards the incumbent president.</span></p> <p><span>That said, gold managed to put up a very strong defence last month against a stronger dollar and surging Treasury yields, especially the 2-year yield which surged higher by more than 40 basis points to 4.62%, thereby once again lifting the opportunity cost of holding a non-coupon paying position in gold. Overall, the metal ended the month with a small loss and ahead of Thursday&rsquo;s long-awaited US PCE core deflator print, the Fed&rsquo;s preferred inflation gauge, gold had behaved like a coiled spring, wanting to trade higher despite yield headwinds, but held back by worries about an inflation surprise. However, with the number in line with expectations, the yellow metal moved higher thereby moving closer to the February high at USD 2065 per ounce.</span></p></div></div><div class="article-image"><img alt="1olh_wcu4" src="https://www.home.saxo/-/media/content-hub/images/2024/march/1olh_wcu4.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>Crude oil stuck in neutral despite underlying strength</span></h3> <p><span>The WTI and Brent crude futures contracts continue to trade within relatively narrow ranges, with WTI between USD 76 and 80, and Brent between USD 81 and 84, with the technical-driven trade the focus at a time when the fundamental drivers have struggled to dictate the direction of prices.</span></p> <p><span>Overall, we maintain the view that Brent and WTI will likely remain rangebound, respectively around USD 80 and USD 75 per barrel during the first quarter and next, but with disruption risks in the Middle East and OPEC+ production restraint potentially leaving the risk/reward skewed to the upside. In the short term, the market will be focusing on WTI and whether traders will be successful in pushing the price through resistance just below USD 80, a level that was unsuccessfully challenged last week. Brent, meanwhile, has got more work to do before potentially attempting a breakout, with the level to watch for that to happen being somewhat higher at USD 85.</span></p> <p><span>Some underlying fundamental strength has emerged this past month with widening price differences between monthly contracts indicating a more robust outlook across parts of the physical market. In the short term, the focus remains on the Red Sea where Houthi attacks continue and next week&rsquo;s OPEC+ meeting which is expected to yield an extension beyond March of the current agreement to keep production curtailed. </span></p></div></div><div class="article-additional-rte"><div class="rte--output"><hr /> <strong></strong> <p><strong><span>Commodity articles:</span></strong></p> <p><span>29 Feb 2024: <a href="https://www.home.saxo/content/articles/podcast/podcast-29-feb-2024---commodities---why-speculative-interest-is-important-for-everyone-29022024">Podcast: Why speculative interest is important to understand</a><br /> 28 Feb 2024: <a href="https://www.home.saxo/content/articles/commodities/oil-price-stuck-in-neutral-despite-underlying-strength-28022024">Oil price stuck in neutral despite underlying strength</a><br /> 27 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/resilient-gold-market-defies-lower-rate-cut-predictions-27022024"><strong><span>Resilient gold market defies lower rate cut predictions</span></strong></a></span><span><br /> 22 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/copper-short-squeeze-fades-ahead-of-key-resistance-22022024"><strong><span>Copper short squeeze fades ahead of key resistance</span></strong></a></span><span><br /> 21 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/golds-resilience-despite-recent-etf-and-futures-selling-21022024"><strong><span>Gold's resilience despite recent futures and ETF selling</span></strong></a></span><span><br /> 20 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024"><strong><span>WTI crude eyes resistance amid improved signals</span></strong></a></span><span><br /> 16 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024"><strong><span>Commodity weekly: Grains tumble; Industrial metals eye China boost</span></strong></a></span><span><br /> 15 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024"><strong><span>US rate cut delay drives gold below $2000</span></strong></a></span><span><br /> 13 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a><span><br /> 7 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a><span><br /> 6 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a><span><br /> 2 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a><span><br /> 1 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a><span><br /> 30 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/gold-and-silver-look-to-fomc-for-direction-30012024"><strong><span>Gold and silver look to FOMC for direction</span></strong></a><span><br /> 29 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/coffee-29012024"><strong><span>Video: Unpacking the reasons behind soaring coffee prices</span></strong></a><span><br /> 26 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---26-jan-2024-26012024"><strong><span>Commodity weekly: Back in black supported by China stimulus</span></strong></a><span><br /> 25 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/grains-up-on-short-covering-softs-supported-by-tight-supply-25012024"><strong><span>Grains up on short covering; softs supported by tight supply</span></strong></a><span><br /> 24 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-24012024"><strong><span>&nbsp;Disruption risks drive specs into Brent; distorted EIA report up next</span></strong></a><span><br /> 23 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024"><strong><span>Silver and copper in focus after recent declines</span></strong></a><span><br /> 19 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a><span><br /> 17 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a><span><br /> 16 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a><span><br /> 12 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a><span><br /> 9 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a><span><br /> 5 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> <strong><br /> <strong><span>Previous "Commitment of Traders" articles</span></strong></strong></span></p> <p><span>26 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---26-feb-2024-26022024"><strong><span>COT:&nbsp;Record corn short, cocoa surge no longer supported by speculators</span></strong></a><span><br /> 19 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024"><strong><span>COT: US inflation surprise drives broad selling of metals</span></strong></a><span><br /> 5 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><span><br /> 29 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024"><strong><span>&nbsp;COT: Squeeze risks after funds sold into rising commodity markets</span></strong></a><span><br /> 22 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><strong><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></strong></a><span><br /> 15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><span><br /> 18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a></p> <p><strong><span></span></strong><span><br /> </span></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Gas Oil</span> <span>Crude Oil</span> <span>Heating Oil</span> <span>Oil and Gas</span> <span>Oil</span> <span>Copper</span> <span>Agriculture</span> <span>China</span> <span>Highlighted articles</span> <span>Wheat</span> <span>Iron Ore</span> <span>Natural Gas</span></div>Fri, 01 Mar 2024 01:25:00 Z2024-03-27T10:51:47Z{68B7CC71-0F51-4879-97B4-C71EB3A80D52}https://www.home.saxo/content/articles/commodities/oil-price-stuck-in-neutral-despite-underlying-strength-28022024Ole Hansenproduct-commoditiesInflationFederal Reservecommodity-crude oilcommodity-gas oilcommodity-heating oilOilsector-Oil and Gasplace-lc/cnOil price stuck in neutral despite underlying strength<div class="article-excerpt">The WTI and Brent crude futures contracts continue to trade within relative narrow ranges with the technical-driven trade the focus at a time when the fundamental drivers have struggled to dictate the direction of prices.</div><div class="article-rte"><div class="rte--output"><span></span> <div> <p><span>The WTI and Brent crude futures contracts continue to trade within relative narrow ranges, in WTI between USD 76 and 80, and Brent between USD 81 and 84, with the technical-driven trade the focus at a time when the fundamental drivers have struggled to dictate the direction of prices.</span></p> <p><span>Overall, we maintain the view Brent and WTI will likely remain rangebound, respectively around USD 80 and USD 75 per barrel during the first quarter and next, but with disruption risks in the Middle East and OPEC+ production restraint potentially leaving the risk/reward skewed to the upside. In the short term, the market will be focusing on WTI and whether traders will be successful in pushing the price through resistance just below USD 80, a level that was unsuccessfully challenged last week. Brent, meanwhile, has got more work to do before potentially attempting a breakout, with the level to watch for that to happen being somewhat higher at USD 85.</span></p> <p><span>Some underlying fundamental strength has emerged this month with widening price differences between monthly contracts indicating a more robust outlook across parts of the physical market. An example being the three-month spread for Brent, which has widened to around a USD 2.25 per barrel backwardation, highest since October, and up from a -USD 0.5 per barrel contango at the start of the year. In the short term, focus remains on the Red Sea where Houthi attacks continue and next week&rsquo;s OPEC+ meeting which is expected to yield an extension beyond March of the current agreement to keep production curtailed.</span></p> <p><span>Ongoing attacks on ships in the Red Sea seem to be partly to blame, with a crude analyst at Kpler saying that oil stockpiles in developed nations have tumbled to the lowest seasonal level in at least four years after Red Sea attacks led to some tankers avoiding the waterway, keeping crude in transit for longer, thereby swelling the volume held at sea to the highest in six months, according to data from Vortexa Ltd via Bloomberg.</span></p> <p><span>A two-day rally earlier this week that followed an equal slump last week was halted last night after the industry-funded American Petroleum Institute reported an 8.4 million barrel increase in nationwide stockpiles. Later today, the EIA will publish its weekly report with surveys pointing to a 3.4 million barrel increase. I will post the results of the EIA report on X at @ole_s_hansen once published at 14:30 GMT.</span></p> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="28olh_oil1" src="https://www.home.saxo/-/media/content-hub/images/2024/february/28olh_oil1.png"/></div><div class="rte--output">Source: Saxo </div><br/><div class="article-additional-rte"><div class="rte--output"><div> <div> <p><span>Below chart shows speculators positioning in crude oil based on weekly Commitment of Traders reports from the CFTC and ICE Europe. The latest update covering forex and commodities can be found<a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---26-feb-2024-26022024"> here</a></span></p> </div> </div></div></div><div class="article-image"><img alt="28olh_oil2" src="https://www.home.saxo/-/media/content-hub/images/2024/february/28olh_oil2.png"/></div><div class="rte--output">Speculators held a combined 410k contract WTI and Brent net long in the week to February 20. Overall, however, it was a mixed week with short covering lifting the WTI long to 134k while fresh short selling reduced the Brent long to 272k.</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>27 Feb 2024: <a href="https://www.home.saxo/content/articles/commodities/resilient-gold-market-defies-lower-rate-cut-predictions-27022024">Resilient gold market defies lower rate cut predictions</a><br /> 22 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/copper-short-squeeze-fades-ahead-of-key-resistance-22022024"><strong><span>Copper short squeeze fades ahead of key resistance</span></strong></a></span><span><br /> 21 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/golds-resilience-despite-recent-etf-and-futures-selling-21022024"><strong><span>Gold's resilience despite recent futures and ETF selling</span></strong></a></span><span><br /> 20 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024"><strong><span>WTI crude eyes resistance amid improved signals</span></strong></a></span><span><br /> 16 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024"><strong><span>Commodity weekly: Grains tumble; Industrial metals eye China boost</span></strong></a></span><span><br /> 15 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024"><strong><span>US rate cut delay drives gold below $2000</span></strong></a></span><span><br /> 13 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a></span><span><br /> 7 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a></span><span><br /> 6 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a></span><span><br /> 2 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a></span><span><br /> 1 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a></span><span><br /> 30 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/gold-and-silver-look-to-fomc-for-direction-30012024"><strong><span>Gold and silver look to FOMC for direction</span></strong></a><span><br /> 29 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/coffee-29012024"><strong><span>Video: Unpacking the reasons behind soaring coffee prices</span></strong></a><span><br /> 26 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---26-jan-2024-26012024"><strong><span>Commodity weekly: Back in black supported by China stimulus</span></strong></a><span><br /> 25 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/grains-up-on-short-covering-softs-supported-by-tight-supply-25012024"><strong><span>Grains up on short covering; softs supported by tight supply</span></strong></a><span><br /> 24 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-24012024"><strong><span>&nbsp;Disruption risks drive specs into Brent; distorted EIA report up next</span></strong></a><span><br /> 23 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024"><strong><span>Silver and copper in focus after recent declines</span></strong></a><span><br /> 19 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a><span><br /> 17 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a><span><br /> 16 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a><span><br /> 12 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a><span><br /> 9 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a><span><br /> 5 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> <strong><br /> <strong><span>Previous "Commitment of Traders" articles</span></strong></strong></span></p> <p><span>26 Feb 2024: <a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---26-feb-2024-26022024">COT:&nbsp;Record corn short, cocoa surge no longer supported by speculators</a><br /> 19 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024"><strong><span>COT: US inflation surprise drives broad selling of metals</span></strong></a><span><br /> 5 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><span><br /> 29 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024"><strong><span>&nbsp;COT: Squeeze risks after funds sold into rising commodity markets</span></strong></a><span><br /> 22 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><strong><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></strong></a><span><br /> 15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><span><br /> 18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Inflation</span> <span>Federal Reserve</span> <span>Crude Oil</span> <span>Gas Oil</span> <span>Heating Oil</span> <span>Oil</span> <span>Oil and Gas</span> <span>China</span></div>Wed, 28 Feb 2024 10:30:00 Z2024-03-27T10:51:48Z{8C2B1A6E-5210-497C-B5C9-928B4C0AE363}https://www.home.saxo/content/articles/commodities/resilient-gold-market-defies-lower-rate-cut-predictions-27022024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal ReserveMiningFocus InflationWeekly NewsletterResilient gold market defies lower rate cut predictions <div class="article-excerpt">Gold continues to grind higher with the current level around $2035 reducing the monthly loss to just 1%, an impressive performance during a month that has seen short-end yields shoot higher in response to a reduction in the expected number of US rate cuts</div><div class="article-rte"><div class="rte--output"><div> <p paraid="1863866904" paraeid="{ad28154e-bff9-4cf1-bce2-7ea83889e9e2}{123}"><span data-contrast="auto">Gold continues to grind higher with the current level around $2035 reducing the monthly loss to just 1%, an impressive performance during a month that has seen US rate cut expectations deflate from six to near three with the first not fully priced in before July. These developments have seen US 10-year yields rise by more than 35 bps to 4.28% while the 2-year yield has jumped by 51 bps to 4.72%, thereby sharply raising the opportunity cost of holding a non-yielding position in gold.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="332967214" paraeid="{ad28154e-bff9-4cf1-bce2-7ea83889e9e2}{163}"><span data-contrast="auto">The rising cost of carry together with the market's obsession with AI-related stocks, potentially driving a false sense of stability across markets, have seen paper demand for gold continue to crumble with total holdings in bullion-backed ETFs down 44 tons this month, and 95 tons so far this year. Against these headwinds, support has been led by a softer dollar and speculators covering short positions that was initiated at the start of the month when gold briefly broke below $2000.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1304189465" paraeid="{ad28154e-bff9-4cf1-bce2-7ea83889e9e2}{205}"><span data-contrast="auto">The US CFTC in their latest Commitments of Traders report covering the week to February 20, showed speculators increased their net long position in COMEX gold futures by 18k contracts (1.8 million ounces or 51 tons) to 64k contracts, the vast majority of which was driven by a 17k contract reduction in the gross short from wrong-footed short sellers. This rinse and repeat action from speculators selling into weakness, and buying into strength has been the prevailing behavior since December during which time gold has been trading within a narrowing range.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="519957632" paraeid="{f2e9b32f-8248-4655-9cfa-40aba4acdeea}{157}"><span data-contrast="auto">Turning our attention to investors' positions in silver we find a similar pattern with total ETF holdings down 437 tons to 21,407 tons on the month so far, its worst monthly withdrawal since last July. Managed money accounts, meanwhile, remain much more receptive to short-term price developments, and just like gold they have been struggling recently, with the lack of momentum leading them to buy highs and sell lows. Weakness at the start of the month saw funds enter net short positions in COMEX silver futures, only to be forced to flip back to a net long in the week to February 20, when a gold and industrial metal bounce supported higher prices.&nbsp;</span></p> </div> <p><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <div> <div> <h3><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="27olh_gc0" src="https://www.home.saxo/-/media/content-hub/images/2024/february/27olh_gc0.png"/></div><div class="rte--output">Positions and weekly changes in ETF investments and futures held by managed money accounts like hedge funds and CTAs in gold (top) and silver (bottom). </div><br/><div class="article-additional-rte"><div class="rte--output"><span data-contrast="auto"><a href="https://www.saxotrader.com/sim/instant-demo/InstantDemo-EN-GL/page/product/FxSpot/8177?activeTab=overview&amp;cmpid=copy_link_platform_sharing"></a></span> <div> <div> <p paraid="354399881" paraeid="{581f1c46-e429-4e05-99c5-fef1642fd7da}{23}"><span data-contrast="auto">The fact gold has &lsquo;only&rsquo; lost the mentioned percentage despite the strong pickup in bond yields and reduced rate cut expectations is likely to have been driven by geopolitical concerns related to tensions in the Middle East, and not least continued strong demand for physical gold from central banks and China&rsquo;s middle class attempting to preserve their dwindling fortunes caused by the property market crisis and a prolonged stock market sell off.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="2091544178" paraeid="{581f1c46-e429-4e05-99c5-fef1642fd7da}{35}"><span data-contrast="auto">We keep a bullish outlook for gold and with that also silver, but as we have highlighted on several occasions in recent months, both metals are likely to remain stuck until we get a better understanding about the delivery of future US rate cuts. Until the first cut is delivered, the market may at times run ahead of itself, in the process building up rate cut expectations to levels that leave prices vulnerable to a correction. With that in mind, the short-term direction of gold and silver will continue to be dictated by incoming economic data and their impact on the dollar, yields and not least rate cut expectations. Not least the PCE Deflator, the Fed&rsquo;s preferred inflation metric which is due on Thursday.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1331425364" paraeid="{581f1c46-e429-4e05-99c5-fef1642fd7da}{59}"><span data-contrast="auto">Spot gold, in a downtrend since Dec, has continued to recover after the recent failed attempt below $2000 helped trigger fresh buying from wrong-footed longs and momentum focused traders looking for a fresh attemp towards the upper channel, currently at $2048 followed by $2065, the February 1 high.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <h3 paraid="1033937941" paraeid="{40b2c94f-ca78-4b98-88a6-b55cc697fffa}{234}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <div> <p paraid="1425391661" paraeid="{7ae875e5-8831-4f3d-9c4d-e0eec23f9053}{112}"><span data-ccp-props="{'134233117':false,'134233118':false,'335559738':0,'335559739':0}"></span></p> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></div></div><div class="article-image"><img alt="27olh_gc2" src="https://www.home.saxo/-/media/content-hub/images/2024/february/27olh_gc2.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><div> <p paraid="1198351697" paraeid="{3b8eadfd-9d4f-424c-8879-aef65fc50888}{121}"><span data-contrast="auto"><span data-contrast="auto">Spot silver, meanwhile, remains locked in a range as well with firm support around $22 while resistance around $23.50 looks equally solid. The current weakness that has seen the gold-silver ratio widen back to 90 ounces of silver per one ounce of gold from a mid-month low around 86, driven by fresh silver futures selling from funds who in the week to February 20 flipped their COMEX silver futures position from a near 10k contract short to a 5k contract net long.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></span></p> </div></div></div><div class="article-image"><img alt="27olh_gc3" src="https://www.home.saxo/-/media/content-hub/images/2024/february/27olh_gc3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <strong></strong> <p><strong><span>Commodity articles:</span></strong></p> <p><span>22 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/copper-short-squeeze-fades-ahead-of-key-resistance-22022024"><strong><span>Copper short squeeze fades ahead of key resistance</span></strong></a></span><span><br /> 21 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/golds-resilience-despite-recent-etf-and-futures-selling-21022024"><strong><span>Gold's resilience despite recent futures and ETF selling</span></strong></a></span><span><br /> 20 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024"><strong><span>WTI crude eyes resistance amid improved signals</span></strong></a></span><span><br /> 16 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024"><strong><span>Commodity weekly: Grains tumble; Industrial metals eye China boost</span></strong></a></span><span><br /> 15 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024"><strong><span>US rate cut delay drives gold below $2000</span></strong></a></span><span><br /> 13 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a></span><span><br /> 7 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a></span><span><br /> 6 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a></span><span><br /> 2 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a></span><span><br /> 1 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a></span><span><br /> 30 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/gold-and-silver-look-to-fomc-for-direction-30012024"><strong><span>Gold and silver look to FOMC for direction</span></strong></a><span><br /> 29 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/coffee-29012024"><strong><span>Video: Unpacking the reasons behind soaring coffee prices</span></strong></a><span><br /> 26 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---26-jan-2024-26012024"><strong><span>Commodity weekly: Back in black supported by China stimulus</span></strong></a><span><br /> 25 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/grains-up-on-short-covering-softs-supported-by-tight-supply-25012024"><strong><span>Grains up on short covering; softs supported by tight supply</span></strong></a><span><br /> 24 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-24012024"><strong><span>&nbsp;Disruption risks drive specs into Brent; distorted EIA report up next</span></strong></a><span><br /> 23 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024"><strong><span>Silver and copper in focus after recent declines</span></strong></a><span><br /> 19 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a><span><br /> 17 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a><span><br /> 16 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a><span><br /> 12 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a><span><br /> 9 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a><span><br /> 5 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> <strong><br /> <strong><span>Previous "Commitment of Traders" articles</span></strong></strong></span></p> <p><span>26 Feb 2024: <a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---26-feb-2024-26022024">COT: Record corn short, cocoa surge no longer supported by speculators</a><br /> 19 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024"><strong><span>COT: US inflation surprise drives broad selling of metals</span></strong></a><span><br /> 5 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><span><br /> 29 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024"><strong><span>&nbsp;COT: Squeeze risks after funds sold into rising commodity markets</span></strong></a><span><br /> 22 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><strong><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></strong></a><span><br /> 15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><span><br /> 18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Mining</span> <span>Focus Inflation</span> <span>Weekly Newsletter</span></div>Tue, 27 Feb 2024 12:30:00 Z2024-03-27T10:51:48Z{5D4A3D20-1D96-42FE-9FA6-656DE1DF437C}https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---26-feb-2024-26022024Ole Hansenproduct-commoditiesCOT Commoditiescommodity-crude oilcommodity-natural gascommodity-goldcommodity-silvercommodity-coppercommodity-platinumcommodity-corncommodity-sugarcommodity-coffeecommodity-gasolinecommodity-palladiumcommodity-wheatcommodity-cocoacommodity-cottoncommodity-cattlesector-gics-1010product-forexCOT FXforex-eurusdforex-usdjpyforex-audusdforex-usdcadforex-usdchfforex-gbpusdforex-nzdusdsubject-is/fin.stpbondBonds Inspirationproduct-bondsproduct-forexEn hurtig tankeCOT: Record corn short, cocoa surge no longer supported by speculators<div class="article-excerpt">Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to last Tuesday, February 20</div><div class="article-rte"><div class="rte--output"><em>Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities while in forex we use the broader measure called non-commercial.</em></div></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>What is the Commitments of Traders report?</span></h3> <p>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.</p> <p>Commodities: Producer/Merchant/Processor/User, Swap dealers,&nbsp;<span>Managed Money</span>&nbsp;and other<br /> Financials: Dealer/Intermediary; Asset Manager/Institutional;&nbsp;<span>Leveraged Funds</span>&nbsp;and other<br /> Forex: A broad breakdown between commercial and&nbsp;<span>non-commercial</span>&nbsp;(speculators)</p> <p>The main reasons why we focus primarily on the behavior of speculators, such as hedge funds and trend-following CTA's are:</p> <ul> <li>They are likely to have&nbsp;<span>tight stops</span>&nbsp;and&nbsp;<span>no underlying exposure</span>&nbsp;that is being hedged</li> <li>This makes them&nbsp;<span>most reactive to changes</span>&nbsp;in fundamental or technical price developments</li> <li>It provides views about&nbsp;<span>major trends</span>&nbsp;but also helps to decipher when a&nbsp;<span>reversal</span>&nbsp;is looming</li> </ul> <p>Do note that&nbsp;<span >this group tends to <strong>anticipate, accelerate, and amplify</strong> price changes that have been set in motion by <strong>fundamentals</strong>. Being followers of momentum, this strategy often sees this group of traders buy into strength and sell into weakness, meaning that they are often found holding the biggest long near the peak of a cycle or the biggest short position ahead of a through in the market.<br /> </span></p> <hr /></div></div><div class="article-additional-rte"><div class="rte--output"><span></span> <div> <span></span> <span></span> <div> <span></span> <div> <div> <div> <div> <div> <div> <div> <span></span> <div> <div> <span data-contrast="none"></span><span></span> <div> <span data-contrast="none"></span> <div> <span data-contrast="none"></span> <div> <span></span> <span></span> <div> <span></span> <div><span></span>&nbsp; <div> <p paraid="195417535" paraeid="{b97640b3-da69-4c4a-9e0a-484912101cb3}{58}"><span data-contrast="none">This summary highlights futures positions and changes made by hedge funds across commodities and forex in the week to last Tuesday, February 20. A week that saw global equity markets maintaining an underlying bid ahead of long-awaited earnings from Nvidia. The dollar meanwhile was heading for its first weekly loss this year while bond yields traded near a three-month high as traders continued to price the prospect of a delayed start to the US rate hike cycle being followed by fewer cuts than previously expected. The commodities sector meanwhile traded lower with gains in metals, both precious and industrial, being offset by losses in energy and agriculture.&nbsp;<br /> </span><span ></span></p> </div> <div> <h3><span data-contrast="none">Commodities:</span></h3> </div> <div> <p paraid="2129298800" paraeid="{b97640b3-da69-4c4a-9e0a-484912101cb3}{120}"><span >The Bloomberg Commodity </span><span >index,</span><span > </span><span >which tracks a basket of 24 major </span><span >futures markets split between energy</span><span > </span><span >(30.1%)</span><span >, metals </span><span >(34.2%) </span><span >and agriculture</span><span > (35.7%)</span><span >,</span><span > </span><span >traded lower for a second week, this time by 0.5</span><span >% </span><span >with losses in energy and agriculture being only partly offset by b</span><span >road gains across the precious and industrial metal sectors. </span><span >Overall,</span><span > the number net long held by money managers held unchanged around 200k lots (NOTE: we have added London cocoa and Robusta coffee to the table)</span><span > with net long positions held in 16 out of the 26 major futures contracts tracked. Do note that we have added London cocoa and Robusta coffee to the table this week.&nbsp;<br /> <br /> </span><span >On an individual level, buyers concentrated their efforts on WTI crude oil, gold, silver, copper, and cotton while sellers lifted their natural gas short to a four-year high and their grains short (corn, soybeans, and wheat) to an all-time high. US grain and oilseed markets have posted historic declines so far this year with a 12% drop in the Bloomberg Grains index being driven by a recovery in global supplies, and prospect for a bumper harvest in South America ahead of the Northern Hemisphere planting season.</span></p> </div> <div> <p paraid="196724374" paraeid="{b97640b3-da69-4c4a-9e0a-484912101cb3}{166}"><span ></span></p> </div> <div> <p paraid="1951631753" paraeid="{db890906-2cbf-41d3-a1d1-41a0a15275d4}{57}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div> </div> <div> <p paraid="1815481085" paraeid="{9dc17bdc-2b11-4bfd-b9b9-624ec6b0c42a}{183}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div> </div> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}" ></span></div> </div> <p paraid="1396398248" paraeid="{a9890f65-bd09-43ce-b941-e232248f0c46}{133}"><span data-contrast="auto"> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p><span> </span></p> <p><span> </span></p> </div> </div> </div> <div> <span data-ccp-props="{'201341983':0,'335559740':259}" ></span></div> </div> </div> <div> <p paraid="739880928" paraeid="{6472d595-91b7-4440-89e9-890d4acd9c8e}{166}"><span data-contrast="none"> </span></p> </div> <p><span> </span></p> </div> <div> <p paraid="1053527918" paraeid="{f64664da-5092-46b8-866f-464e46bdf07a}{149}"><span data-ccp-props="{}"></span></p> </div> </div> </div> </div></div></div><div class="article-image"><img alt="26olh_cot1" src="https://www.home.saxo/-/media/content-hub/images/2024/february/26olh_cot1.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <h3><span data-contrast="auto">Speculators no longer to blame for ongoing cocoa surge</span></h3> </div> <div> <p paraid="993758726" paraeid="{b97640b3-da69-4c4a-9e0a-484912101cb3}{216}"><span data-contrast="auto">Cocoa futures extended their parabolic surge last week, rising 17% to record a year-to-date gain of 58%. The ongoing surge has been driven by a worse-than-expected deficit in 2023-24, the third in a row, due to adverse developments in West Africa, the world&rsquo;s top producing region, accounting for around 75% of global production, due to harmful intense dry winds lowering production while small-lot farmers struggle to receive an income large enough for them to afford much needed but expensive pesticides and fertilizers to combat diseases while maintaining production from ageing trees.&nbsp;<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="1992572311" paraeid="{d9d638f5-4b2d-4b26-b5ed-d6b8b12ac197}{1}"><span data-contrast="auto">Arrivals of bags from cocoa farmers to ports in Ivory Coast, the number one shipper, are currently down around one-third on last year, and with the mid-season crop after March now also looking challenged, it has raised concerns about the availability of cocoa to meet already agreed sales obligations, potentially leaving some of the major chocolate producers short changed, forcing them to enter the futures market to secure supplies, inadvertently turning buyers of futures instead of normal selling (hedging) activity.<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="1122022881" paraeid="{d9d638f5-4b2d-4b26-b5ed-d6b8b12ac197}{21}"><span data-contrast="auto">As a result, the one-year futures spread (backwardation) between May 2024 and May 2025 has blown out to 20% as the producers bid up the spot market in order to secure supplies and to cover hedges. Looking at the COT data we find producers increasingly being the main buyer as they cut short positions while hedge funds have been net sellers for weeks, in the process cutting their net long to an 11-month low.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div></div></div><div class="article-image"><img alt="26olh_cot0" src="https://www.home.saxo/-/media/content-hub/images/2024/february/26olh_cot0.png"/></div><div class="article-image"><img alt="26olh_cot2" src="https://www.home.saxo/-/media/content-hub/images/2024/february/26olh_cot2.png"/></div><div class="rte--output">Energy: A mixed week in crude oil with short covering lifting the WTI long to 134k while fresh short selling reduced the Brent long to 272k. The natural gas short, using four Henry Hub deliverable contracts, jumped to a four-year high just before Chesapeake announced a price supportive production cut.</div><br/><div class="article-image"><img alt="26olh_cot3" src="https://www.home.saxo/-/media/content-hub/images/2024/february/26olh_cot3.png"/></div><div class="rte--output">Metals: A softer dollar and China demand optimism helped drive broad buying interest led by a 39% jump in the gold net long to 64k, purely on short covering, and a 79% collapse in the copper net short to 9k.</div><br/><div class="article-image"><img alt="26olh_cot4" src="https://www.home.saxo/-/media/content-hub/images/2024/february/26olh_cot4.png"/></div><div class="rte--output">Grains: The net short in the three major crops hit a record high (since 2006) at 546k contracts with all contracts seeing selling as the technical and fundamental outlook favored the sellers. Corn led the selling with the net short hitting a fresh record high at 341k. </div><br/><div class="article-image"><img alt="26olh_cot5" src="https://www.home.saxo/-/media/content-hub/images/2024/february/26olh_cot5.png"/></div><div class="rte--output">Softs: The cocoa long was cut to an 11-month low with producer short covering the main driver behind an ongoing surge. An uninterrupted six-week rally has driven the cotton long to a 28-month high</div><br/><div class="article-image"><img alt="26olh6" src="https://www.home.saxo/-/media/content-hub/images/2024/february/26olh6.png"/></div><div class="rte--output">Forex: Speculators turned against the greenback after five weeks of buying, resulting in a drop in the gross long versus eight IMM futures contracts falling to just $1bn. A first week of EUR buying in six weeks being partly offset by selling of JPY, CHF and GBP</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>22 Feb 2024:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/copper-short-squeeze-fades-ahead-of-key-resistance-22022024">Copper short squeeze fades ahead of key resistance</a><br /> 21 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/golds-resilience-despite-recent-etf-and-futures-selling-21022024"><strong><span>Gold's resilience despite recent futures and ETF selling</span></strong></a><span><br /> 20 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024"><strong><span>WTI crude eyes resistance amid improved signals</span></strong></a><span><br /> 16 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024"><strong><span>Commodity weekly: Grains tumble; Industrial metals eye China boost</span></strong></a><span><br /> 15 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024"><strong><span>US rate cut delay drives gold below $2000</span></strong></a><span><br /> 13 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a><span><br /> 9 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a><span><br /> 9 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a><span><br /> 7 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a><span><br /> 6 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a><span><br /> 2 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a><span><br /> 1 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a><span><br /> 30 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/gold-and-silver-look-to-fomc-for-direction-30012024"><strong><span>Gold and silver look to FOMC for direction</span></strong></a><span><br /> 29 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/coffee-29012024"><strong><span>Video: Unpacking the reasons behind soaring coffee prices</span></strong></a><span><br /> 26 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---26-jan-2024-26012024"><strong><span>Commodity weekly: Back in black supported by China stimulus</span></strong></a><span><br /> 25 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/grains-up-on-short-covering-softs-supported-by-tight-supply-25012024"><strong><span>Grains up on short covering; softs supported by tight supply</span></strong></a><span><br /> 24 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-24012024"><strong><span>&nbsp;Disruption risks drive specs into Brent; distorted EIA report up next</span></strong></a><span><br /> 23 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024"><strong><span>Silver and copper in focus after recent declines</span></strong></a><span><br /> 19 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a><span><br /> 17 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a><span><br /> 16 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a><span><br /> 12 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a><span><br /> 9 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a><span><br /> 5 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> <strong><br /> <strong><span>Previous "Commitment of Traders" articles</span></strong></strong></span></p> <p><span>19 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024"><strong><span>COT: US inflation surprise drives broad selling of metals</span></strong></a><span><br /> 5 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><span><br /> 29 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024"><strong><span>&nbsp;COT: Squeeze risks after funds sold into rising commodity markets</span></strong></a><span><br /> 22 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><strong><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></strong></a><span><br /> 15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><span><br /> 18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>COT Commodities</span> <span>Crude Oil</span> <span>Natural Gas</span> <span>Gold</span> <span>Silver</span> <span>Copper</span> <span>Platinum</span> <span>Corn</span> <span>Sugar</span> <span>Coffee</span> <span>Gasoline</span> <span>Palladium</span> <span>Wheat</span> <span>Cocoa</span> <span>Cotton</span> <span>Cattle</span> <span>Energy (Sector)</span> <span>Forex</span> <span>COT FX</span> <span>EURUSD</span> <span>USDJPY</span> <span>AUDUSD</span> <span>USDCAD</span> <span>USDCHF</span> <span>GBPUSD</span> <span>NZDUSD</span> <span>Government Bonds</span> <span>Bonds nspiration</span> <a href="https://www.home.saxo/insights/news-and-research/bonds">Bonds</a> <a href="https://www.home.saxo/insights/news-and-research/forex">Forex</a> <span>En hurtig tanke</span></div>Mon, 26 Feb 2024 11:00:00 Z2024-03-27T10:51:31Z{50621ED1-5A1C-4693-8EF3-11E70540D33E}https://www.home.saxo/content/articles/commodities/copper-short-squeeze-fades-ahead-of-key-resistance-22022024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal ReserveMiningFocus Inflationcommodity-coppercompany-freeport-mcmoran copperCopper short squeeze fades ahead of key resistance<div class="article-excerpt">The industrial metal sector, led by nickel and copper, is currently heading for its best two-week run of gains since December supported by growth optimism in China and the potential threat to supply from additional sanctions against Russia</div><div class="article-rte"><div class="rte--output"><div> <p paraid="1161071634" paraeid="{c5d01824-a2a9-464c-936a-3376b1ebe14a}{117}"><span data-contrast="auto">The industrial metal sector is currently heading for its best two-week run of gains since December with the Bloomberg Industrial Metal index trading up close to 4% since hitting a September 2022 low at the start of the month. Gains during this time have been broad and lead by beaten down nickel, and followed by copper, the king of green metals, while aluminum has struggled despite renewed threats to Russian supply amid the prospect for a major package of curbs - potentially including Russian aluminum sales - to be announced by the US on February 23.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1560299579" paraeid="{c5d01824-a2a9-464c-936a-3376b1ebe14a}{169}"><span data-contrast="auto">In addition to supply potentially being disrupted due to fresh sanctions, the sector has also benefitted from growing demand optimism, as the US look set to avoid a recession while economic data in Europe show signs of stabilizing, and most importantly additional measures being announced by the Chinese government to support an ailing economy which nevertheless is expected to pick some post Lunar holiday momentum. Supporting the idea about added stimulus rose after Chinese banks cut their 5-year loan prime rate by the most on record in order to cut mortgage costs to boost sentiment among businesses and households.&nbsp;</span></p> </div> <p><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <div> <div> <h3><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="22olh_im1" src="https://www.home.saxo/-/media/content-hub/images/2024/february/22olh_im1.png"/></div><div class="article-additional-rte"><div class="rte--output"><span data-contrast="auto"><a href="https://www.saxotrader.com/sim/instant-demo/InstantDemo-EN-GL/page/product/FxSpot/8177?activeTab=overview&amp;cmpid=copy_link_platform_sharing"></a></span> <div> <div> <p paraid="1558217738" paraeid="{c5d01824-a2a9-464c-936a-3376b1ebe14a}{210}"><span data-contrast="auto">Global inventories of key industrial metals held in warehouses watched by the major exchanges in London and Shanghai remain historically low, potentially a bullish price signal once major central banks begin their, for now, delayed rate cut cycle. Lower interest rates may boost an overdue recycling phase as it lowers the opportunity cost of holding inventories. In a recent analysis Goldman Sachs calculated that gold and copper would get the largest immediate boost from Fed easing. </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1777599835" paraeid="{9365143e-c619-4a73-832f-0faace017153}{206}"><span data-contrast="auto">In addition, lower US interest rates may support a weakening of the dollar, thereby lowering the cost of dollar-priced commodities in local currencies. Note, some of the strength this week across commodities, including industrial metals, has been driven by the first week of broad dollar weakness since December with the general risk appetite receiving a boost following a bumper result from Nvidia, the AI titan.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="180409891" paraeid="{399331b6-cf20-44db-80d8-8913b1a65003}{5}"><span data-contrast="auto">Overall, copper remains rangebound with the mentioned China growth concerns being offset by speculation that the Chinese government will have to do more to support an ailing economy, and not least the prospect for a tightening market outlook as the green transformation continues to gather momentum and miners cut their production forecasts as they face harder-to-mine deposits, rising costs, water restrictions and increased scrutiny of new permits.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="287514947" paraeid="{399331b6-cf20-44db-80d8-8913b1a65003}{35}"><span data-contrast="auto">The bounce this past week has been amplified by short covering from wrong-footed hedge funds who during a two-week period to February 13 &ndash; when HG copper fell 5.25% - increased their net short futures position by 39,000 contracts (442k Metric Tonnes) to a four-year high at 42,000 contracts.&nbsp;</span></p> <h3 paraid="1033937941" paraeid="{40b2c94f-ca78-4b98-88a6-b55cc697fffa}{234}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <div> <p paraid="1425391661" paraeid="{7ae875e5-8831-4f3d-9c4d-e0eec23f9053}{112}"><span data-ccp-props="{'134233117':false,'134233118':false,'335559738':0,'335559739':0}"></span></p> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></div></div><div class="article-image"><img alt="22olh_im2" src="https://www.home.saxo/-/media/content-hub/images/2024/february/22olh_im2.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <p paraid="1989187661" paraeid="{a61952c4-dd68-464d-a35d-bd8ec583e78c}{239}"><span data-contrast="auto"><span data-contrast="auto">Despite concerns about the Chinese property sector, last year's sharp increase in funding rates and more recently a jump in Treasury yields, HG and LME copper futures have traded rangebound since last May, within an increasingly narrowing range, in High Grade currently between $3.61 and $3.91, with the upper level touched earlier today before attracting some profit taking. Copper&rsquo;s resilience during this period points to an eventual breakout to the upside, initially confirmed by a move above $4, while a break below $3.61 may signal a prolonged period of range bound trading until the expected supply tightness become more visible, especially during the second half of the year.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></span></p> </div></div></div><div class="article-image"><img alt="22olh_im3" src="https://www.home.saxo/-/media/content-hub/images/2024/february/22olh_im3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodities articles:</span></strong></p> <p><span>21 Feb 2024: <a href="https://www.home.saxo/content/articles/commodities/golds-resilience-despite-recent-etf-and-futures-selling-21022024">Gold's resillience despite recent futures and ETF selling</a><br /> 20 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024"><strong><span>WTI crude eyes resistance amid improved signals</span></strong></a></span><span><br /> 16 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024"><strong><span>Commodity weekly: Grains tumble; Industrial metals eye China boost</span></strong></a></span><span><br /> 15 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024"><strong><span>US rate cut delay drives gold below $2000</span></strong></a></span><span><br /> 13 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a></span><span><br /> 7 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a></span><span><br /> 6 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a></span><span><br /> 2 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a></span><span><br /> 1 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a></span><span><br /> 30 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/gold-and-silver-look-to-fomc-for-direction-30012024"><strong><span>Gold and silver look to FOMC for direction</span></strong></a></span><span><br /> 29 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/coffee-29012024"><strong><span>Video: Unpacking the reasons behind soaring coffee prices</span></strong></a><span><br /> 26 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---26-jan-2024-26012024"><strong><span>Commodity weekly: Back in black supported by China stimulus</span></strong></a><span><br /> 25 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/grains-up-on-short-covering-softs-supported-by-tight-supply-25012024"><strong><span>Grains up on short covering; softs supported by tight supply</span></strong></a><span><br /> 24 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-24012024"><strong><span>&nbsp;Disruption risks drive specs into Brent; distorted EIA report up next</span></strong></a><span><br /> 23 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024"><strong><span>Silver and copper in focus after recent declines</span></strong></a></span><span><br /> 19 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a></span><span><br /> 17 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a><span><br /> 16 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a><span><br /> 12 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a><span><br /> 9 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a><span><br /> 5 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> <strong><br /> <strong><span>Previous "Commitment of Traders" articles</span></strong></strong><br /> </span></p> <p><span>19 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024"><strong><span>COT: US inflation surprise drives broad selling of metals</span></strong></a><span><br /> 5 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><span><br /> 29 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024"><strong><span>&nbsp;COT: Squeeze risks after funds sold into rising commodity markets</span></strong></a><span><br /> 22 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><strong><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></strong></a><span><br /> 15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><span><br /> 18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Mining</span> <span>Focus Inflation</span> <span>Copper</span> <span>Freeport-mcmoran Copper</span></div>Thu, 22 Feb 2024 12:00:00 Z2024-03-27T10:51:37Z{E32E771F-9AF4-4693-A5C0-68A15674E487}https://www.home.saxo/content/articles/commodities/golds-resilience-despite-recent-etf-and-futures-selling-21022024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal ReserveMiningFocus InflationWeekly NewsletterGold’s resilience despite recent ETF and futures selling <div class="article-excerpt">Gold trades higher for a fifth day with the bid being supported by speculators covering short positions and buying back longs that was exited during last week's failed attempt to trigger a technical-driven sell-off below $2000.</div><div class="article-rte"><div class="rte--output"><div> <p paraid="525968663" paraeid="{3b8eadfd-9d4f-424c-8879-aef65fc50888}{38}"><span data-contrast="auto">Gold trades higher for a fifth day with the bid being supported by speculators covering short positions and buying back longs that was exited during last week's failed attempt to trigger a technical-driven sell-off below $2000. In addition, an underlying bid from central banks and retail buyers of physical gold continues to play its part in disrupting last week&rsquo;s attempt to drive prices lower as Treasury yields rose and the traders moderated their US rate cut expectations.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="2031538126" paraeid="{3b8eadfd-9d4f-424c-8879-aef65fc50888}{76}"><span data-contrast="auto">The precious metal market, led by gold, started the year on a high note following a strong Q4-23 when the Fed focus finally turned from rate hikes to cuts. However, since then resilient economic data have driven down expectations for future rate cuts while delaying the timing of the first until mid-year. However, despite these headwinds, spot gold around $2030 only trades down 1.7% on the year, a muted response to a +2.5% stronger dollar, a 40 bps rise in US 10-year Treasury yields and expectations for 2024 rate cuts almost reduced by 75 basis points. </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1868126513" paraeid="{3b8eadfd-9d4f-424c-8879-aef65fc50888}{82}"><span data-contrast="auto">Investors in so-called &lsquo;paper&rsquo; gold: being exchange-traded funds and money managers in futures have as expected responded to these challenges. Since late December total ETF holdings saw a 2.6-million-ounce reduction to 82.9 million, a four-year low while money managers such as hedge funds and CTA&rsquo;s, often responding to short-term technical developments, cut their futures net long by 8.9 million ounces or 6.6% to 4.64 million (46,400 futures contracts), a four-month low. In the latest reporting week, when $2000 was being challenged funds sold 36,000 futures contracts at a volume weighted average price (VWAP) of $2036, a level that has now been exceeded, thereby leaving the bulk of these sold positions underwater.&nbsp;</span></p> </div> <p><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <div> <div> <h3><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="21olh_gc0" src="https://www.home.saxo/-/media/content-hub/images/2024/february/21olh_gc0.png"/></div><div class="article-additional-rte"><div class="rte--output"><span data-contrast="auto"><a href="https://www.saxotrader.com/sim/instant-demo/InstantDemo-EN-GL/page/product/FxSpot/8177?activeTab=overview&amp;cmpid=copy_link_platform_sharing"></a></span> <div> <div> <p paraid="2124117258" paraeid="{90d0dbe7-0662-4134-9b51-85ac01fddbd4}{82}"><span data-contrast="auto"><br /> <span data-contrast="auto">The fact gold has &lsquo;only&rsquo; lost the mentioned percentage despite the stronger dollar, a pickup in bond yields and reduced rate cut expectations is likely to have been driven by geopolitical concerns related to tensions in the Middle East, and not least continued strong demand for physical gold from central banks and China&rsquo;s middle class attempting to preserve their dwindling fortunes caused by the property market crisis and a prolonged stock market sell off. Ahead of the Chinese New Year holiday last week, the </span><a href="https://www.gold.org/goldhub/gold-focus/2024/02/chinas-gold-market-january-wholesale-gold-demand-jumped-official-gold" target="_blank" rel="noopener noreferrer"><span data-contrast="none">World Gold Council</span></a><span data-contrast="auto"> reported wholesale gold demand in China had seen its strongest January ever with 271 tons (9.6 million ounces) bought while the PBoC reported the 15th consecutive gold purchase in January, adding 10 tons to their gold reserves lifting the total to 2,245 tons. </span></span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <h3 paraid="1033937941" paraeid="{40b2c94f-ca78-4b98-88a6-b55cc697fffa}{234}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <div> <p paraid="1425391661" paraeid="{7ae875e5-8831-4f3d-9c4d-e0eec23f9053}{112}"><span data-ccp-props="{'134233117':false,'134233118':false,'335559738':0,'335559739':0}"></span></p> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></div></div><div class="article-image"><img alt="21olh_gc1" src="https://www.home.saxo/-/media/content-hub/images/2024/february/21olh_gc1.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <p paraid="1198351697" paraeid="{3b8eadfd-9d4f-424c-8879-aef65fc50888}{121}"><span data-contrast="auto">This data being backed by Swiss customs data which showed Swiss gold exports surged in January to their highest level since December 2016. Switzerland is the world&rsquo;s biggest bullion refining and transit hub, and the 49% increase last month from a year ago was driven by robust sales to China and Hong Kong.&nbsp;<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="493521736" paraeid="{3b8eadfd-9d4f-424c-8879-aef65fc50888}{137}"><span data-contrast="auto">Silver, which is not enjoying the same amount of interest from physical buyers, especially non-existent demand from central banks, has nevertheless managed to keep up with gold&rsquo;s recent bounce as seen through the gold-silver ratio&rsquo;s drop to around 88 ounces of silver to one ounce of gold after hitting a near 92 high last month. Silver has just like gold been on the receiving end of speculator selling, which in the week to February left hedge funds holding a 9.6k lots net-short, the biggest belief in lower prices since last March.&nbsp;<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="1302955828" paraeid="{3b8eadfd-9d4f-424c-8879-aef65fc50888}{169}"><span data-contrast="auto">Short covering since last Tuesday has been further strengthened by copper&rsquo;s rally to a three-month high after Chinese banks cut their mortgage reference rate by the most on record in support for the troubled property sector. A move that has raised expectations for more aggressive measures to support the economy and consumer confidence in the months ahead.&nbsp;<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="1512828511" paraeid="{3b8eadfd-9d4f-424c-8879-aef65fc50888}{185}"><span data-contrast="auto">We keep a bullish outlook for gold and silver, but as we have highlighted on several occasions in recent months, both metals are likely to remain stuck until we get a better understanding about the delivery of future US rate cuts. Until the first cut is delivered, the market may at times run ahead of itself, in the process building up rate cut expectations to levels that leave prices vulnerable to a correction. With that in mind, the short-term direction of gold and silver will continue to be dictated by incoming economic data and their impact on the dollar, yields and not least rate cut expectations.&nbsp;<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="94543101" paraeid="{3b8eadfd-9d4f-424c-8879-aef65fc50888}{229}"><span data-contrast="auto">Spot gold, in a downtrend since Dec, trades up for fifth day supported by continued physical demand and short-covering following last weeks failed attempt below $2000 per ounce. While support for now looks solid below $2000, resistance can be found at $2032, the 50-day moving average, $2052, the upper channel and $2065, the February 1 high.</span></p> </div></div></div><div class="article-image"><img alt="21olh_gc3" src="https://www.home.saxo/-/media/content-hub/images/2024/february/21olh_gc3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <strong></strong> <p><strong><span>Commodities articles:</span></strong></p> <p><span>20 Feb 2024: <a href="https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024">WTI crude eyes resistance amid improved signals</a><br /> 16 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024"><strong><span>Commodity weekly: Grains tumble; Industrial metals eye China boost</span></strong></a></span><span><br /> 15 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024"><strong><span>US rate cut delay drives gold below $2000</span></strong></a></span><span><br /> 13 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a></span><span><br /> 7 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a></span><span><br /> 6 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a></span><span><br /> 2 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a></span><span><br /> 1 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a></span><span><br /> 30 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/gold-and-silver-look-to-fomc-for-direction-30012024"><strong><span>Gold and silver look to FOMC for direction</span></strong></a><span><br /> 29 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/coffee-29012024"><strong><span>Video: Unpacking the reasons behind soaring coffee prices</span></strong></a><span><br /> 26 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---26-jan-2024-26012024"><strong><span>Commodity weekly: Back in black supported by China stimulus</span></strong></a><span><br /> 25 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/grains-up-on-short-covering-softs-supported-by-tight-supply-25012024"><strong><span>Grains up on short covering; softs supported by tight supply</span></strong></a><span><br /> 24 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-24012024"><strong><span>&nbsp;Disruption risks drive specs into Brent; distorted EIA report up next</span></strong></a><span><br /> 23 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024"><strong><span>Silver and copper in focus after recent declines</span></strong></a></span><span><br /> 19 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a></span><span><br /> 17 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a><span><br /> 16 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a><span><br /> 12 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a><span><br /> 9 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a><span><br /> 5 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> <strong><br /> <strong><span>Previous "Commitment of Traders" articles</span></strong></strong><br /> </span></p> <p><span>19 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024"><strong><span>COT: US inflation surprise drives broad selling of metals</span></strong></a><span><br /> 5 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><span><br /> 29 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024"><strong><span>&nbsp;COT: Squeeze risks after funds sold into rising commodity markets</span></strong></a><span><br /> 22 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><strong><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></strong></a><span><br /> 15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><span><br /> 18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Mining</span> <span>Focus Inflation</span> <span>Weekly Newsletter</span></div>Wed, 21 Feb 2024 13:30:00 Z2024-03-27T10:51:37Z{268FDFAE-67A5-4E64-B0F4-608F2E7EA3F9}https://www.home.saxo/content/articles/commodities/wti-crude-eyes-key-resistance-20022024Ole Hansenproduct-commoditiesInflationFederal Reservecommodity-crude oilcommodity-gas oilcommodity-heating oilOilsector-Oil and Gasplace-lc/cnWTI crude eyes key resistance <div class="article-excerpt">Having spent the past three months rangebound within a 12-dollar range WTI crude oil is once again challenging key resistance in the $80 area, while Brent faces a steeper climb to its $85 resistance level</div><div class="article-rte"><div class="rte--output"><span></span> <div> <p><span>Having spent the past three months rangebound within a 12-dollar range around $74/b, WTI crude oil is once again challenging key resistance in the $80 area. </span><span>Brent, similarly, confined around $79, faces a steeper climb to its $85 resistance level</span><span>. During this time prices of both have struggled to gain momentum with geopolitical concerns and OPEC+ production cuts offsetting demand concerns, not least in China, the world&rsquo;s top importer of crude. </span></p> <p><span>This month has, however, seen a strong rebound, initially supported by fuel market tightness leading to higher </span><span>refinery margins, or so-called crack spreads. Not least diesel prices which found support after global stock levels fell below their seasonal averages, supported by refinery disruptions in Russia amid Ukraine drone strikes, and not least continued attacks by Houthi on shipping in the Red Sea and the Gulf of Aden. The latter have led to the re-routing of east-west tankers from the Red Sea and the Suez Canal to the much longer route around Africa, in the process tying up millions of barrels of diesel and gasoil on the water for longer. </span></p> <p><span>While some of that support has faded with crack spreads easing, crude oil has nevertheless managed to maintain a bid amid continued Red Sea worries and signs the crude market has started to tighten up. </span><span>The alternating market focus seen in recent months helped create a very difficult trading environment with directional bets by speculators failing on several occasions, forcing trading positions, both long and short, to be adjusted on a regular basis, thereby triggering moves that found little fundamental justification. </span></p> <p><span>However, in the latest reporting week to February 13, money managers showed an increased belief in higher prices, not least in Brent, the global benchmark, after they boosted their outright long positions to the highest level since October 2021 while the net position reached an 11-month high at 276k contracts or 276 million barrels. Positioning in WTI remains relatively weak with a net long at 116k contracts, some 44k contracts above a five-year low reached just before the Red Sea crisis began in early December. </span></p> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="20olh_oil1" src="https://www.home.saxo/-/media/content-hub/images/2024/february/20olh_oil1.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <div> <p><span>The price difference between monthly contracts has been widening, indicating a more robust outlook across parts of the physical market. The three-month spreads shown above for WTI and Brent have both widened to around a $2 per barrel backwardation, highest since October, and up from a -$0.5 per barrel contango at the start of the year. In the short term, focus remains on the Red Sea where Houthi attacks continue while a Qatar attempt to broker ceasefire deal between Israel and Hamas has so far been fruitless. In addition, ahead of the OPEC+ meeting in early March, the group&rsquo;s effort to trim output seems to be successful. </span></p> <p><span>Overall, we maintain the view Brent and WTI</span><span> </span><span>will likely remain rangebound, respectively around $80 and $75 per barrel during the first quarter but with disruption risks, OPEC+ production restraint, and incoming rate cuts potentially leaving the risk/reward skewed to the upside. In the short term, the market will be focusing on WTI and whether traders will be successful in pushing the price through resistance just below $80, the result of which, could see it target $81.37 followed by $82.56. </span></p> <p><span>For a closer look at the technical perspective for WTI and Brent, please check out this latest <a href="https://www.home.saxo/content/articles/commodities/technical-analysis-wti-brent-crude-oil-natural-gas-20022024">update</a>&nbsp;from Kim Cramer, our technical analyst. </span></p> </div> </div></div></div><div class="article-image"><img alt="20olh_oil2" src="https://www.home.saxo/-/media/content-hub/images/2024/february/20olh_oil2.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodities articles:</span></strong></p> <p><span>16 Feb 2024: <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024">Commodity weekly: Grains tumble; Industrial metals eye China boost</a><br /> 15 Feb 2024: <a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024">US rate cut delay drives gold below $2000</a><br /> 13 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a></span><span><br /> 7 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a></span><span><br /> 6 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a></span><span><br /> 2 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a></span><span><br /> 1 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a></span><span><br /> 30 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/gold-and-silver-look-to-fomc-for-direction-30012024"><strong><span>Gold and silver look to FOMC for direction</span></strong></a><span><br /> 29 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/coffee-29012024"><strong><span>Video: Unpacking the reasons behind soaring coffee prices</span></strong></a><span><br /> 26 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---26-jan-2024-26012024"><strong><span>Commodity weekly: Back in black supported by China stimulus</span></strong></a><span><br /> 25 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/grains-up-on-short-covering-softs-supported-by-tight-supply-25012024"><strong><span>Grains up on short covering; softs supported by tight supply</span></strong></a><span><br /> 24 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-24012024"><strong><span>&nbsp;Disruption risks drive specs into Brent; distorted EIA report up next</span></strong></a><span><br /> 23 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024"><strong><span>Silver and copper in focus after recent declines</span></strong></a><span><br /> 19 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a><span><br /> 17 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a><span><br /> 16 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a><span><br /> 12 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a><span><br /> 9 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a><span><br /> 5 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> <strong><br /> <strong><span>Previous "Commitment of Traders" articles</span></strong></strong><br /> </span></p> <p><span>19 Feb 2024: <a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024">COT: US inflation surprise drives broad selling of metals</a><br /> 5 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><span><br /> 29 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024"><strong><span>&nbsp;COT: Squeeze risks after funds sold into rising commodity markets</span></strong></a><span><br /> 22 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><strong><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></strong></a><span><br /> 15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><span><br /> 18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Inflation</span> <span>Federal Reserve</span> <span>Crude Oil</span> <span>Gas Oil</span> <span>Heating Oil</span> <span>Oil</span> <span>Oil and Gas</span> <span>China</span></div>Tue, 20 Feb 2024 12:00:00 Z2024-03-27T10:51:37Z{C0AF084C-17F3-48EE-8B8C-A46791A7CDE5}https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---19-feb-2024-19022024Ole Hansenproduct-commoditiesCOT Commoditiescommodity-crude oilcommodity-natural gascommodity-goldcommodity-silvercommodity-coppercommodity-platinumcommodity-corncommodity-sugarcommodity-coffeecommodity-gasolinecommodity-palladiumcommodity-wheatcommodity-cocoacommodity-cottoncommodity-cattlesector-gics-1010product-forexCOT FXforex-eurusdforex-usdjpyforex-audusdforex-usdcadforex-usdchfforex-gbpusdforex-nzdusdsubject-is/fin.stpbondBonds Inspirationproduct-bondsproduct-forexEn hurtig tankeCOT: US Inflation surprise drives broad speculative selling of metals<div class="article-excerpt">Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to last Tuesday, February 13</div><div class="article-rte"><div class="rte--output"><em>Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities while in forex we use the broader measure called non-commercial.</em></div></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>What is the Commitments of Traders report?</span></h3> <p>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.</p> <p>Commodities: Producer/Merchant/Processor/User, Swap dealers,&nbsp;<span>Managed Money</span>&nbsp;and other<br /> Financials: Dealer/Intermediary; Asset Manager/Institutional;&nbsp;<span>Leveraged Funds</span>&nbsp;and other<br /> Forex: A broad breakdown between commercial and&nbsp;<span>non-commercial</span>&nbsp;(speculators)</p> <p>The main reasons why we focus primarily on the behavior of speculators, such as hedge funds and trend-following CTA's are:</p> <ul> <li>They are likely to have&nbsp;<span>tight stops</span>&nbsp;and&nbsp;<span>no underlying exposure</span>&nbsp;that is being hedged</li> <li>This makes them&nbsp;<span>most reactive to changes</span>&nbsp;in fundamental or technical price developments</li> <li>It provides views about&nbsp;<span>major trends</span>&nbsp;but also helps to decipher when a&nbsp;<span>reversal</span>&nbsp;is looming</li> </ul> <p>Do note that&nbsp;<span >this group tends to <strong>anticipate, accelerate, and amplify</strong> price changes that have been set in motion by <strong>fundamentals</strong>. Being followers of momentum, this strategy often sees this group of traders buy into strength and sell into weakness, meaning that they are often found holding the biggest long near the peak of a cycle or the biggest short position ahead of a through in the market.<br /> </span></p> <hr /></div></div><div class="article-additional-rte"><div class="rte--output"><span></span> <div> <span></span> <span></span> <div> <span></span> <div> <div> <div> <div> <div> <div> <div> <span></span> <div> <div> <span data-contrast="none"></span><span></span> <div> <span data-contrast="none"></span> <div> <span data-contrast="none"></span> <div> <span></span> <span></span> <div> <span></span> <div><span></span>&nbsp; <div> <p paraid="1951631753" paraeid="{db890906-2cbf-41d3-a1d1-41a0a15275d4}{57}"><span data-contrast="none">This summary highlights futures positions and changes made by hedge funds across commodities and forex in the week to last Tuesday, February 13. A week that saw global equities take a breather while bond yields and the dollar spiked after hotter-than-expected US inflation data dealt a blow to Fed rate cut hopes, forcing the market to price a delay of the first as well as revising lower the number of subsequent cuts. In commodities, the metal sector sold off on the back of this, thereby joining ongoing weakness across the grains sector, while renewed strength returned to energy with softs continuing higher.&nbsp;</span><span ></span></p> </div> <div> <h3><span data-contrast="none">Commodities:</span></h3> </div> <div> <p paraid="2129298800" paraeid="{db890906-2cbf-41d3-a1d1-41a0a15275d4}{129}"><span >The Bloomberg Commodity </span><span >index,</span><span > </span><span >which tracks a basket of 24 major </span><span >futures markets split between energy</span><span > </span><span >(30.1%)</span><span >, metals </span><span >(34.2%) </span><span >and agriculture</span><span > (35.7%)</span><span >, </span><span >lost 0.4% during the reporting period, pr</span><span >imarily due to losses across the metals sector </span><span >after </span><span >the stronger than expected US inflation print</span><span > raised doubts about the timing and depth of incoming US rate cuts</span><span >. </span><span >The grains sector</span><span > continued to be challenged by ample supply and bulging global stocks, </span><span >with the Bloomberg Grains index </span><span >falling to a fresh </span><span >three-year low</span><span >.</span></p> </div> <div> <p paraid="1169624948" paraeid="{db890906-2cbf-41d3-a1d1-41a0a15275d4}{185}"><span data-contrast="auto">Partly offsetting these developments, the softs sector continued higher, with tight supply supporting all four futures markets, not least cocoa, which continued its recent parabolic rise. Elsewhere, the energy market traded mixed with strong rallies across crude oil and fuel products being partly offset by a 16% natural gas slump.&nbsp;<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <h3><span data-contrast="auto">Gold&rsquo;s resilience despite strong ETF and futures selling</span></h3> </div> <div> <p paraid="674898119" paraeid="{db890906-2cbf-41d3-a1d1-41a0a15275d4}{217}"><span data-contrast="auto">The precious metal market, led by gold, started the year on a high note following a strong Q4-23 when the Fed focus finally turned from rate hikes to cuts. However, since then resilient economic data have driven down expectations for future rate cuts while delaying the timing of the first until mid-year. At the end of the latest reporting week to February 13, gold traded down only 3.4% on the year, a muted response to a +3% stronger dollar, a 44 bps rise in US 10-year Treasury yields and expectations for 2024 rate cuts almost reduced by 75 basis points.&nbsp;<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="96040766" paraeid="{db890906-2cbf-41d3-a1d1-41a0a15275d4}{249}"><span data-contrast="auto">Investors in so-called &lsquo;paper&rsquo; gold: being exchange-traded funds and money managers in futures have as expected responded to these challenges. Since late December total ETF holdings saw a 2.6 million ounce reduction to 82.9 million, a four-year low while money managers such as hedge funds and CTA&rsquo;s, often responding to short-term technical developments, cut their futures net long by 8.9 million ounces or 6.6% to 4.64 million (46,400 futures contracts), a four-month low.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="2107175924" paraeid="{9e1a6601-be0a-407a-ba14-7158f607e8ac}{30}"><span data-contrast="auto"><br /> The fact gold has &lsquo;only&rsquo; lost the mentioned percentage despite the stronger dollar, a pickup in bond yields and reduced rate cut expectations is likely to have been driven by geopolitical concerns related to tensions in the Middle East, and not least continued strong demand for physical gold from central banks and China&rsquo;s middle class attempting to preserve their dwindling fortunes caused by the property market crisis and one of the world&rsquo;s worst performing stock markets as well as a weakening yuan. Ahead of the Chinese New Year holiday last week, the </span><a href="https://www.gold.org/goldhub/gold-focus/2024/02/chinas-gold-market-january-wholesale-gold-demand-jumped-official-gold" target="_blank" rel="noopener noreferrer"><span data-contrast="none">World Gold Council</span></a><span data-contrast="auto"> reported wholesale gold demand in China had seen its strongest January ever with 271 tons (9.6 million ounces) bought while the PBoC reported the 15</span><span data-contrast="auto">th</span><span data-contrast="auto"> consecutive gold purchase in January, adding 10 tons to their gold reserves lifting the total to 2,245 tons.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div> </div> <div> <p paraid="1815481085" paraeid="{9dc17bdc-2b11-4bfd-b9b9-624ec6b0c42a}{183}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div> </div> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}" ></span></div> </div> <p paraid="1396398248" paraeid="{a9890f65-bd09-43ce-b941-e232248f0c46}{133}"><span data-contrast="auto"> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p><span> </span></p> <p><span> </span></p> </div> </div> </div> <div> <span data-ccp-props="{'201341983':0,'335559740':259}" ></span></div> </div> </div> <div> <p paraid="739880928" paraeid="{6472d595-91b7-4440-89e9-890d4acd9c8e}{166}"><span data-contrast="none"> </span></p> </div> <p><span> </span></p> </div> <div> <p paraid="1053527918" paraeid="{f64664da-5092-46b8-866f-464e46bdf07a}{149}"><span data-ccp-props="{}"></span></p> </div> </div> </div> </div></div></div><div class="article-image"><img alt="19olh_cot0" src="https://www.home.saxo/-/media/content-hub/images/2024/february/19olh_cot0.png"/></div><div class="article-image"><img alt="19olh_cot1" src="https://www.home.saxo/-/media/content-hub/images/2024/february/19olh_cot1.png"/></div><div class="rte--output">Heavy selling of metals and continued short selling across grains were only partly offset by renewed demand for crude oil adn fuel products as well as continued buying of softs</div><br/><div class="article-image"><img alt="19olh_cot2" src="https://www.home.saxo/-/media/content-hub/images/2024/february/19olh_cot2.png"/></div><div class="rte--output">Energy: A fuel product-led rally saw crude oil rally by more than 5%, driving a 58.4k contracts jump in the combined net long to 392k contracts, some 20k below the Red Sea crisis peak from Feb 2. Gas oil led the charge with a 22% increase to 81.4k while a 16% natural gas slump lifted the net short to a four-year high.</div><br/><div class="article-image"><img alt="19olh_cot3" src="https://www.home.saxo/-/media/content-hub/images/2024/february/19olh_cot3.png"/></div><div class="rte--output">Metals: Broad selling set up the end of week rally with gold length cut 44% to a 4-month low, silver and copper net shorts both doubled while the palladium short reached a fresh record high. </div><br/><div class="article-image"><img alt="19olh_cot4" src="https://www.home.saxo/-/media/content-hub/images/2024/february/19olh_cot4.png"/></div><div class="rte--output">Grains: Continued but slowing selling of soybeans and corn drove the sector short to 604k contracts, some 103k less than the May 2019 record high </div><br/><div class="article-image"><img alt="19olh_cot5" src="https://www.home.saxo/-/media/content-hub/images/2024/february/19olh_cot5.png"/></div><div class="rte--output">Softs: The cocoa net long was cut by 21% after traders began booking profit following a near 50% in less than five weeks. The cotton long jumped 54% to a 21-month high while the coffee long reached a two-year high. </div><br/><div class="article-image"><img alt="19olh_cot6" src="https://www.home.saxo/-/media/content-hub/images/2024/february/19olh_cot6.png"/></div><div class="rte--output">In forex, the speculative flows continued to favor the dollar which returned to a net long for the first time since November, as aggressive short selling of JPY and a further reduction in the EUR long was only partly offset by demand for GBP and MXN. </div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>2 Feb 2024: <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024">Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</a><br /> 1 Feb 2024: <a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024">Commodities: January performance and ETF flows</a><br /> 30 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/gold-and-silver-look-to-fomc-for-direction-30012024">Gold and silver look to FOMC for direction</a><br /> 29 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/coffee-29012024">Video: Unpacking the reasons behind soaring coffee prices</a><br /> 26 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---26-jan-2024-26012024"><strong><span>Commodity weekly: Back in black supported by China stimulus</span></strong></a></span><span><br /> 25 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/grains-up-on-short-covering-softs-supported-by-tight-supply-25012024"><strong><span>Grains up on short covering; softs supported by tight supply</span></strong></a></span><span><br /> 24 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-24012024"><strong><span>&nbsp;Disruption risks drive specs into Brent; distorted EIA report up next</span></strong></a></span><span><br /> 23 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024"><strong><span>Silver and copper in focus after recent declines</span></strong></a></span><span><br /> 19 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a></span><span><br /> 17 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a></span><span><br /> 16 Jan 2024:</span><span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a></span><span><br /> 12 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a></span><span><br /> 9 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a></span><span><br /> 5 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a></span><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> 21 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a><span><br /> 19 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a><span><br /> 14 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a></span><span><br /> 13 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a></span><span><br /> 12 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a></span><span><br /> 1 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a></span><span><br /> 30 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a></span><span><br /> 23 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a></span><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a></span><span><br /> 22 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a><span>?<br /> 17 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a></span><span><br /> <br /> <br /> </span></p> <p><strong><span>Previous "Commitment of Traders" articles</span></strong><strong><span><br /> <br /> </span></strong><span>29 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024"><strong><span>&nbsp;COT: Squeeze risks after funds sold into rising commodity markets</span></strong></a><span><br /> 22 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><strong><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></strong></a><span><br /> 15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><strong><span><br /> </span></strong><span>18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a><span><br /> 20 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023"><strong><span>COT: Crude selling slows, grains in demand</span></strong></a><span><br /> 14 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023"><strong><span>COT: Crude long slumps; agriculture sector in demand</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>COT Commodities</span> <span>Crude Oil</span> <span>Natural Gas</span> <span>Gold</span> <span>Silver</span> <span>Copper</span> <span>Platinum</span> <span>Corn</span> <span>Sugar</span> <span>Coffee</span> <span>Gasoline</span> <span>Palladium</span> <span>Wheat</span> <span>Cocoa</span> <span>Cotton</span> <span>Cattle</span> <span>Energy (Sector)</span> <span>Forex</span> <span>COT FX</span> <span>EURUSD</span> <span>USDJPY</span> <span>AUDUSD</span> <span>USDCAD</span> <span>USDCHF</span> <span>GBPUSD</span> <span>NZDUSD</span> <span>Government Bonds</span> <span>Bonds nspiration</span> <a href="https://www.home.saxo/insights/news-and-research/bonds">Bonds</a> <a href="https://www.home.saxo/insights/news-and-research/forex">Forex</a> <span>En hurtig tanke</span></div>Mon, 19 Feb 2024 11:30:00 Z2024-03-27T10:51:43Z{50F81021-529F-45F8-83BF-C818570BE3E5}https://www.home.saxo/content/articles/commodities/commodity-weekly---16-feb-2024-16022024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal Reservecommodity-gas oilcommodity-crude oilcommodity-heating oilsector-Oil and GasOilcommodity-copperAgricultureplace-lc/cnHighlighted articlescommodity-wheatIron Orecommodity-natural gasCommodity weekly: Grains tumble, industrial metals eye China boost<div class="article-excerpt">Commodities suffered a fresh setback this past week with all sectors except industrial metals losing ground amid ample supply, mild weather, and muted risk appetite after traders ended up pricing a further delay in the timing of the first US rate cut</div><div class="article-rte"><div class="rte--output"><ul data-sourcepos="7:1-11:0"> <li data-sourcepos="7:1-7:121"><span>Natural gas:</span><span>&nbsp;Prices plunged on mild winter and lower-than-expected inventory draw</span><span>.</span></li> <li data-sourcepos="8:1-8:119"><span>Grains:</span><span>&nbsp;Corn,</span><span>&nbsp;soybeans,</span><span>&nbsp;and wheat extended losses on forecasts of ample US stocks and South American competition.</span></li> <li data-sourcepos="9:1-9:143"><span>Metals:</span><span>&nbsp;Gold dipped on hot US inflation but recovered partially,</span><span>&nbsp;silver outperformed.</span><span>&nbsp;Industrial metals rallied ahead of China reopening.</span></li> <li data-sourcepos="10:1-11:0"><span>Crude oil:</span><span>&nbsp;Remained near $80/barrel,</span><span>&nbsp;supported by OPEC+ cuts and potential risk premium,</span><span>&nbsp;but limited upside seen.</span></li> </ul> <p><span><br /> Commodities suffered a fresh setback this past week with all sectors except industrial metals losing ground amid ample supply, mild weather, and muted risk appetite after traders ended up pricing a further delay in the timing of the first US rate cut. Overall, the Bloomberg Commodity Total Return index, stuck within a relative tight trading range for the past two months, traded lower by around 1.3% with the year-to-date losses rising to 2.4%. This, however, excludes under-pressure natural gas &ndash; the index trading close to unchanged on the year.&nbsp; </span></p> <p><span>On an individual level, the mild winter across the northern hemisphere continues to weigh on natural gas prices, especially in the US where the Henry Hub futures contract slumped by more than 11% this past week to levels last seen during Covid shutdowns in 2020. The contract lost further altitude after the EIA reported a weekly inventory draw of just 49 billion cubic feet, some 100 bcf less than the five-year average, and with winter demand slowing, the surplus relative to the long-term average climbed to 15.9%, leaving ample supplies in underground storage facilities ahead of the injection season which normally starts around April. </span></p></div></div><div class="article-image"><img alt="16olh_wcu2" src="https://www.home.saxo/-/media/content-hub/images/2024/february/16olh_wcu2.png"/></div><div class="article-additional-rte"><div class="rte--output"><p><span> </span></p> <div> <p><span>The primary sector driving the negative performance so far this year continues to be the grains sector which during the past year has lost more than 22% with three-year lows seen in corn and soybeans this past week when the slump extended after the USDA, at its annual Outlook Forum, gave forecasts for US 2024 planting and 2024/25 ending stocks. Despite lower acreage allocations to corn and wheat, the report nevertheless showed a sharp rise in ending stocks for all three major crops, driven by increased export competition from South America to China for corn and soybeans, as well as forecast for bumper wheat crops in Russia and Europe this coming season. US soybeans stocks were forecast to expand by 38% to a five-year high, corn 16.6% to a 1988 high while wheat stocks was forecast to rise 16.9% to a four-year high. Overall, the Bloomberg Grains index slumped to a fresh three-year low with year-on-year losses reaching 32% in wheat, 26.5% in corn and 9% in soybeans.</span></p> <p><em><span>The WisdomTree Grains, a UCITS eligible exchange traded commodity (ETC) designed to track the Bloomberg Grains Subindex Total Return, split between soybeans (36.5%), corn (35.2%, CBT Wheat (17.3%) and KCB Wheat (11%).&nbsp; </span></em></p> </div></div></div><div class="article-image"><img alt="16olh_wcu0" src="https://www.home.saxo/-/media/content-hub/images/2024/february/16olh_wcu0.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><p><span>The metals sector traded mixed with gold suffering a setback following a hotter-than-expected US inflation print, only to recover some of its poise after retail sales failed to meet expectations. Silver, meanwhile, was heading for its best performance relative to gold since December, supported by a strong bounce across the industrial metal sector ahead of the reopening of China following their prolonged Lunar New Year holiday. </span></p> <p><span>Natural gas aside, the rest of the energy sector traded mixed with recent strong gains in refined fuel contracts deflating a bit while crude oil traded near unchanged on the week, but still nearer the upper end of the relatively tight range it&rsquo;s been in this year. We maintain the view that Brent is likely to stay range bound around $80 per barrel with WTI doing the same around $76, based on the assumption that a geopolitical risk premium will struggle to build amid limited risk of the current crisis in the Middle East spreading to key production areas, while support will be provided by extended OPEC+ production cuts and a general improvement in risk appetite as we approach an incoming US rate cutting cycle. </span></p></div></div><div class="article-image"><img alt="16olh_wcu1" src="https://www.home.saxo/-/media/content-hub/images/2024/february/16olh_wcu1.png"/></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>No change in our bullish gold and silver outlook despite latest setback</span></h3> <p><span>We maintain a bullish outlook for gold and silver, but as we have highlighted on several occasions in recent months, both metals are likely to remain stuck until we get a better understanding about the delivery of future US rate cuts. Until the first cut is delivered, the market may at times run ahead of itself, in the process building up rate cut expectations to levels that leave prices vulnerable to a correction. With that in mind, the short-term direction of gold and silver will continue to be dictated by incoming economic data and their impact on the dollar, yields and not least rate cut expectations. </span></p> <p><span>One key focus remains the short-term rates market which has gone from pricing in more than six 25 basis points US rate cuts this year to less than four, while bets on the timing of the first cut have moved out to June, potentially leaving a very narrow window available for rate cuts. This is based on the assumption that the FOMC is unlikely to cut rates near the November US Presidential election in order to avoid being accused of showing favoritism towards the incumbent president. </span></p> <p><span>Having broken below key support in the $2005-10 area, the market is currently engaged in a battle between selling from short-term momentum strategies and continued physical demand &ndash; supporting a soft floor &ndash; from central banks and retail investors, primarily in the Middle East, India and not least China&rsquo;s middle class attempting to preserve their dwindling fortunes caused by the property market crisis and one of the world&rsquo;s worst performing stock markets as well as the weakening yuan. Ahead of the Chinese New Year holiday this week, the </span><span><a href="https://www.gold.org/goldhub/gold-focus/2024/02/chinas-gold-market-january-wholesale-gold-demand-jumped-official-gold"><span>World Gold Council</span></a></span><span> reported wholesale gold demand in China had seen its strongest January ever with 271 tons bought while the PBoC reported the 15<sup>th</sup> consecutive gold purchase in January, adding 10 tons to their gold reserves lifting the total to 2,245 tons. </span></p> <p><span>The fact that silver has managed to perform better than gold during a week of weakness highlights its dual role as an investment and industrial metal. Strength across industrial metals not only helped prevent silver from slipping below key support in the 22 per ounce area, it also ended up supporting a strong short covering bounce that saw the gold-silver ratio slump to a December low near 87 ounces of silver to one ounce of gold, from a recent peak near 92.</span></p> <p><span>In the short-term, gold needs to reestablish support in the $2000 area while silver will be looking towards next week&rsquo;s reopening of the Chinese markets to see whether the industrial metal sector can build on recent gains to support an attempt by silver to challenge key resistance at 23.32, the late January peak as well as the 200-day moving average. </span></p> <p><em><span>Spot Silver (XAGUSD)</span></em></p> <h3 class="article-heading--3"><span> <br /> </span></h3></div></div><div class="article-image"><img alt="16olh_wcu3" src="https://www.home.saxo/-/media/content-hub/images/2024/february/16olh_wcu3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>Industrial metals look to a reopening Chinese market for support</span></h3> <p><span>As mentioned, the industrial metal sector staged a strong comeback during a week that initially saw the Bloomberg Industrial Metal index slump to a September 2022 low before rising on growing optimism ahead of the reopening of the Chinese markets following their prolonged Lunar New Year holiday. Construction is expected to ramp up in the world&rsquo;s biggest metals consumer in coming weeks, with the seasonal winter lull drawing to an end.&nbsp;For now, the recovery has primarily been driven by short covering from speculators, not least in HG copper futures where hedge funds and CTAs in the week to February 6 had increased their net short position six-fold to 20,500 contracts. </span></p> <p><span>Overall, copper remains rangebound with China growth concerns being offset by speculation that the Chinese government will have to do more to support an ailing economy, and not least the prospect for a tightening market outlook as the green transformation continues to gather momentum and miners cut their production forecasts as they face harder-to-mine deposits, rising costs, water restrictions and increased scrutiny of new permits. </span></p> <p><span>At the current price around $3.80, the HG copper futures contract trades near the center of a range that was established between the July 2022 low at $3.13 per pound and the January 2023 high at $4.355 per pound. We expect this rangebound trading behavior to continue until the expected supply tightness become more visible, especially during the second half of the year. </span></p> <p><em><span>High Grade Copper future</span></em></p></div></div><div class="article-image"><img alt="16olh_wcu4" src="https://www.home.saxo/-/media/content-hub/images/2024/february/16olh_wcu4.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <strong></strong> <p><strong><span>Commodities articles:</span></strong></p> <p><span>15 Feb 2024: <a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024">US rate cut delay drives gold below $2000</a><br /> 13 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024"><strong><span>Video: What is driving Cocoa's sweet price</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024"><strong><span>Commodity weekly: Refined product strength lifts crude</span></strong></a></span><span><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a></span><span><br /> 7 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a></span><span><br /> 6 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a></span><span><br /> 2 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a></span><span><br /> 1 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a></span><span><br /> 30 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/gold-and-silver-look-to-fomc-for-direction-30012024"><strong><span>Gold and silver look to FOMC for direction</span></strong></a><span><br /> 29 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/coffee-29012024"><strong><span>Video: Unpacking the reasons behind soaring coffee prices</span></strong></a><span><br /> 26 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---26-jan-2024-26012024"><strong><span>Commodity weekly: Back in black supported by China stimulus</span></strong></a><span><br /> 25 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/grains-up-on-short-covering-softs-supported-by-tight-supply-25012024"><strong><span>Grains up on short covering; softs supported by tight supply</span></strong></a><span><br /> 24 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-24012024"><strong><span>&nbsp;Disruption risks drive specs into Brent; distorted EIA report up next</span></strong></a><span><br /> 23 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024"><strong><span>Silver and copper in focus after recent declines</span></strong></a><span><br /> 19 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a><span><br /> 17 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a><span><br /> 16 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a><span><br /> 12 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a><span><br /> 9 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a><span><br /> 5 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> 21 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a><span><br /> 19 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a><span><br /> 14 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a><span><br /> 13 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a><span><br /> 12 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a><span><br /> 1 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a><span><br /> <br /> <strong><br /> <strong><span>Previous "Commitment of Traders" articles</span></strong></strong><br /> <br /> <br /> </span></p> <p><span>5 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><span><br /> 29 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024"><strong><span>&nbsp;COT: Squeeze risks after funds sold into rising commodity markets</span></strong></a><span><br /> 22 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><strong><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></strong></a><span><br /> 15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><span><br /> 18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a></p> <p><strong><span></span></strong><span><br /> </span></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Gas Oil</span> <span>Crude Oil</span> <span>Heating Oil</span> <span>Oil and Gas</span> <span>Oil</span> <span>Copper</span> <span>Agriculture</span> <span>China</span> <span>Highlighted articles</span> <span>Wheat</span> <span>Iron Ore</span> <span>Natural Gas</span></div>Fri, 16 Feb 2024 14:00:00 Z2024-03-27T10:51:38Z{C0F36B1C-10F9-4955-945A-196189D536D8}https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-15022024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal ReserveMiningFocus InflationWeekly NewsletterUS rate cut delay drives gold below $2000<div class="article-excerpt">Gold prices have stabilized after falling below a key support level with higher than expected US inflation once again delaying the timing of the first US rate cut.</div><div class="article-rte"><div class="rte--output"><div> <p paraid="1001312856" paraeid="{6bee3859-ec08-49a7-9aa1-f255465d0e47}{121}"><span data-contrast="auto">Gold has stabilized following Tuesday&rsquo;s slump below support-turned-resistance at $2005 after US inflation surprised to the upside, thereby raising further doubts about the timing, pace and dept of future US rate cuts. A potential delay in the timing of the first rate cut, now pushed back to the June 12 FOMC meeting, saw US bond yields spike higher with the 10-year rising to 4.33%, a 51-basis point jump in just two weeks. Meanwhile, the yield jump saw the Bloomberg dollar index reach a three-month high, supported by the prospect for other central banks like BOE, ECB and SNB acting sooner thereby lifting the greenback's relative attractiveness.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="17884607" paraeid="{6bee3859-ec08-49a7-9aa1-f255465d0e47}{187}"><span data-contrast="auto">We keep a bullish outlook for gold and silver, but as we have highlighted on several occasions in recent months, both metals are likely to remain stuck until we get a better understanding about the delivery of future US rate cuts. Until the first cut is delivered, the market may at times run ahead of itself, in the process building up rate cut expectations to levels that leave prices vulnerable to a correction. With that in mind, the short-term direction of gold and silver will continue to be dictated by incoming economic data and their impact on the dollar, yields and not least rate cut expectations.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="406976900" paraeid="{6bee3859-ec08-49a7-9aa1-f255465d0e47}{223}"><span data-contrast="auto">As mentioned, the short-term rates market has gone from pricing in more than six 25 basis points US rate cuts this year to less than four, while bets on the timing of the first cut has moved out to June, potentially leaving a very narrow window available for rate cuts. This based on the assumption the FOMC are unlikely to cut rates near the November US Presidential election in order to avoid being accused of showing favoritism towards the incumbent president.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="677631251" paraeid="{90d0dbe7-0662-4134-9b51-85ac01fddbd4}{24}"><span data-contrast="auto">Having broken below key support, the market is currently engaged in a battle between selling from short-term momentum strategies and continued physical demand &ndash; supporting a soft floor - from central banks and retail investors, primarily in the Middle East, India and not least China&rsquo;s middle class attempting to preserve their dwindling fortunes caused by the property market crisis and one of the world&rsquo;s worst performing stock markets as well as the weakening yuan. Ahead of the Chinese New Year holiday this week, the </span><a href="https://www.gold.org/goldhub/gold-focus/2024/02/chinas-gold-market-january-wholesale-gold-demand-jumped-official-gold" target="_blank" rel="noopener noreferrer"><span data-contrast="none">World Gold Council</span></a><span data-contrast="auto"> reported wholesale gold demand in China had seen its strongest January ever with 271 tons bought while the PBoC reported the 15</span><span data-contrast="auto">th</span><span data-contrast="auto"> consecutive gold purchase in January, adding 10 tons to their gold reserves lifting the total to 2,245 tons.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <p><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <div> <div> <h3><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="15olh_gc1" src="https://www.home.saxo/-/media/content-hub/images/2024/february/15olh_gc1.png"/></div><div class="article-additional-rte"><div class="rte--output"><span data-contrast="auto"><a href="https://www.saxotrader.com/sim/instant-demo/InstantDemo-EN-GL/page/product/FxSpot/8177?activeTab=overview&amp;cmpid=copy_link_platform_sharing"></a></span> <div> <div> <p paraid="2124117258" paraeid="{90d0dbe7-0662-4134-9b51-85ac01fddbd4}{82}"><span data-contrast="auto">In their 2023 review, the World Gold Council described another year of blistering demand, led by central bank buying and jewelry consumption. Central bank buying reached 1,037 tons, just 45 tons short of the 2022 record, while jewelry consumption despite the high price environment held steady at 2,093 tons. Numbers like this help explain why constant outflows from exchange-traded funds since May 2022 have had such a limited negative price impact. During this time asset managers and other investors have looked elsewhere amid the rising funding and opportunity cost compared to holding a position in bonds, and this situation is unlikely to change until US rates are being cut, hence the need for patience.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <h3><span data-contrast="auto">Spot gold (XAUUSD)</span></h3> <p paraid="186430434" paraeid="{90d0dbe7-0662-4134-9b51-85ac01fddbd4}{108}"><span data-contrast="auto">According to Kim Cramer, our technical analyst, the </span><span data-contrast="none"><a href="https://www.home.saxo/content/articles/commodities/technical-analysis-gold-below-2k-silver-testing-key-support-14022024">short-term technical outlook</a></span><span data-contrast="auto"> has deteriorated following the break below $2005 and it would require a close above that level to return to neutral while a break above $2065, the recent high is needed for the market to turn bullish again. However, given the potential for non-visible physical demand, especially once China returns to work next week, the downside risk may end up being relatively limited, with the market instead prolonging its current wait-and-see stance.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <h3 paraid="1033937941" paraeid="{40b2c94f-ca78-4b98-88a6-b55cc697fffa}{234}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <div> <p paraid="1425391661" paraeid="{7ae875e5-8831-4f3d-9c4d-e0eec23f9053}{112}"><span data-ccp-props="{'134233117':false,'134233118':false,'335559738':0,'335559739':0}"></span></p> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></div></div><div class="article-image"><img alt="15olh_gc2" src="https://www.home.saxo/-/media/content-hub/images/2024/february/15olh_gc2.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><h3><span data-contrast="auto">Spot silver (XAGUSD)</span></h3> <p paraid="1035584924" paraeid="{90d0dbe7-0662-4134-9b51-85ac01fddbd4}{170}"><span data-contrast="auto">The white metal meanwhile continues to find support in the key $22 area with the latest attempt once again triggering demand from short sellers inclined to book profit rather than trying to force the price lower. Ahead of the high CPI-driven weakness speculators, such as hedge funds and CTA&rsquo;s, held the biggest net short since August at 4784 contracts, and with $21.90 support holding once again some short covering has emerged to take it higher to relative safety and back to short-term. However, to change the outlook back to bullish, a close above the January high at $23.35 will be needed.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"><br /> </span></p></div></div><div class="article-image"><img alt="15olh_gc3" src="https://www.home.saxo/-/media/content-hub/images/2024/february/15olh_gc3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <strong></strong> <p><strong><span>Commodities articles:</span></strong></p> <p><span>13 Feb 2024: <a href="https://www.home.saxo/content/articles/commodities/cocoa-13022024">Video: What is driving Cocoa's sweet price</a><br /> 9 Feb 2024: <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024">Commodity weekly: Refined product strength lifts crude</a><br /> 9 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024"><strong><span>Podcast: Year of the metals</span></strong></a></span><span><br /> 7 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024"><strong><span>Crude oil supported by tightening fuel outlook</span></strong></a></span><span><br /> 6 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a></span><span><br /> 2 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a></span><span><br /> 1 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a></span><span><br /> 30 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/gold-and-silver-look-to-fomc-for-direction-30012024"><strong><span>Gold and silver look to FOMC for direction</span></strong></a><span><br /> 29 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/coffee-29012024"><strong><span>Video: Unpacking the reasons behind soaring coffee prices</span></strong></a><span><br /> 26 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---26-jan-2024-26012024"><strong><span>Commodity weekly: Back in black supported by China stimulus</span></strong></a><span><br /> 25 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/grains-up-on-short-covering-softs-supported-by-tight-supply-25012024"><strong><span>Grains up on short covering; softs supported by tight supply</span></strong></a><span><br /> 24 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-24012024"><strong><span>&nbsp;Disruption risks drive specs into Brent; distorted EIA report up next</span></strong></a><span><br /> 23 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024"><strong><span>Silver and copper in focus after recent declines</span></strong></a><span><br /> 19 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a><span><br /> 17 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a><span><br /> 16 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a><span><br /> 12 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a><span><br /> 9 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a><span><br /> 5 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> 21 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a><span><br /> 19 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a><span><br /> 14 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a><span><br /> 13 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a><span><br /> 12 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a><span><br /> 1 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a><span><br /> <br /> <strong><br /> <strong><span>Previous "Commitment of Traders" articles</span></strong></strong><br /> <br /> </span></p> <p><span>5 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><span><br /> 29 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024"><strong><span>&nbsp;COT: Squeeze risks after funds sold into rising commodity markets</span></strong></a><span><br /> 22 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><strong><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></strong></a><span><br /> 15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><span><br /> 18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Mining</span> <span>Focus Inflation</span> <span>Weekly Newsletter</span></div>Thu, 15 Feb 2024 11:30:00 Z2024-03-27T10:51:38Z{991EBDBF-270A-4E9E-84CC-3E8DA93DCFE2}https://www.home.saxo/content/articles/commodities/cocoa-13022024Ole Hansenproduct-commoditiescommodity-cocoaHighlighted articlesWhat is driving cocoa's sweet price?<div class="article-excerpt">Cocoa is experiencing a sweet surge - not in flavour, but in its market value. Discover the factors driving up cocoa prices by exploring the complexities of supply shortages, rising production costs, and how these elements intertwine to shape the current cocoa conundrum.</div><div class="article-rte"><div class="rte--output"><div> <h2><span data-contrast="none">Understanding the surge in cocoa prices</span></h2> </div> <div> <p paraid="1330135884" paraeid="{71a677b7-fa33-4b30-81ae-f2dbccea555d}{31}"><span data-contrast="none">In the realm of food commodities, witnessing a sharp increase in prices is a rare event. Yet, this is precisely what's unfolding in the cocoa market. Over the past year, NY cocoa prices have soared by more than 200%, including a notable surge of 97% just in this year.&nbsp;<span dir="ltr">The London based cocoa future has rallied even stronger, with the May 2024 futures contract up 105% YTD.&nbsp;</span></span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':279}"></span></p> </div> <div> <p paraid="1874364903" paraeid="{71a677b7-fa33-4b30-81ae-f2dbccea555d}{38}"><span data-contrast="none">This significant uptick can be traced back to a combination of factors, especially in West Africa. Here, the Ivory Coast and Ghana are recognised as the leading global producers of cocoa beans. The past year has introduced challenging weather conditions in these countries, particularly intense heat, which has negatively impacted cocoa production.&nbsp;<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':279}"></span></p> </div> <div> <p paraid="2025966264" paraeid="{48c211e2-cb1c-470c-83ea-33bf21999992}{125}"><span data-contrast="none">Furthermore, the escalating costs of pesticides and fertilisers have imposed financial strains on farmers, making it harder for them to procure these vital components for crop maintenance. Complicating matters are the pests that have targeted cocoa plants, further diminishing yields.<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':279}"></span></p> </div> <div> <h2><span data-contrast="none">Impact of surging cocoa prices on traders and investors</span></h2> </div> <div> <p paraid="15994485" paraeid="{71a677b7-fa33-4b30-81ae-f2dbccea555d}{52}"><span data-contrast="none">The prevailing circumstances pose an interesting scenario for traders and investors alike. With cocoa production witnessing a downturn&mdash;evidenced by a 40% decrease in arrivals at Ivory Coast ports compared to the previous season&mdash;the supply chain has felt the pinch. This reduction in supply occurs as a significant portion of the cocoa is pre-sold to companies and manufacturers of cocoa and chocolate products. Faced with the challenge of fulfilling these commitments, these entities are compelled to look for alternative sources. This scramble for cocoa has led to a squeeze in the futures market for cocoa prices.<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':279}"></span></p> </div> <div> <h2><span data-contrast="none">Consumer impact of rising cocoa prices</span></h2> </div> <div> <p paraid="2133573517" paraeid="{71a677b7-fa33-4b30-81ae-f2dbccea555d}{66}"><span data-contrast="none">From the consumer's standpoint, the immediate effects of the spike in cocoa prices might not be directly noticeable. Typically, it can take anywhere from 6 to 12 months for such price hikes to be reflected in the retail pricing of products. Nevertheless, in the forthcoming period, consumers should brace for an uptick in chocolate bar prices.<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':279}"></span></p> </div> <div> <p paraid="1954084681" paraeid="{71a677b7-fa33-4b30-81ae-f2dbccea555d}{73}"><span data-contrast="none">Additionally, the trend of shrinkflation is likely to become more pronounced. This practice involves reducing the size of chocolate bars or the quantity of chocolates in a package while keeping prices constant. Consequently, while there might not be a stark rise in the price tags of chocolate items, the quantity offered for the same price will see a reduction.<br /> <br /> <em>Edit note: Performance data for cocoa updated March 19, 2024.&nbsp;&nbsp;</em></span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':279}"></span></p> </div></div></div><div class="article-video"><iframe title="" src="//saxobank.23video.com/13846859.ihtml/player.html?source=embed&photo_id=94502041"></iframe></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Cocoa</span> <span>Highlighted articles</span></div>Tue, 13 Feb 2024 11:40:00 Z2024-03-27T10:51:38Z{E091FCB4-50E8-4C89-815B-7440CB3B1FDF}https://www.home.saxo/content/articles/commodities/commodity-weekly---9-feb-2024-09022024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal Reservecommodity-gas oilcommodity-crude oilcommodity-heating oilsector-Oil and GasOilcommodity-copperAgricultureplace-lc/cnHighlighted articlescommodity-wheatIron Orecommodity-natural gasCommodity weekly: Refined product strength lifts crude<div class="article-excerpt">The commodities sector continues to trade range bound with the Bloomberg Commodity Index hovering within a narrow 3.5% range since mid-December. During this period, strong gains in softs and energy have been offsetting losses across industrial metals and not least grains. </div><div class="article-rte"><div class="rte--output"><ul data-sourcepos="5:1-10:0"> <li data-sourcepos="5:1-5:126">The commodities sector remains rangebound,&nbsp;with gains in softs and energy offsetting losses in industrial metals and grains.</li> <li data-sourcepos="6:1-6:101">Geopolitical tensions in the Middle East and a potential delay in US rate cuts support some prices.</li> <li data-sourcepos="7:1-7:75">Cocoa prices surge due to supply concerns,&nbsp;raising chocolate price fears.</li> <li data-sourcepos="8:1-8:67">Uranium rally pauses after production updates from major players.</li> <li data-sourcepos="9:1-10:0">Gold and silver stuck in stalemate,&nbsp;awaiting clarity on US rate cuts.</li> </ul> <p><span>The commodities sector continues to trade range bound with the Bloomberg Commodity Index hovering within a narrow 3.5% range since mid-December. During this period, strong gains in softs and energy have been offsetting losses across industrial metals and not least grains. Markets have struggled for direction, with China&rsquo;s latest attempt to underpin a struggling economy having a limited impact. Meanwhile, hopes for a ceasefire in Gaza continue to be quashed, adding to continued worries about stability in the Middle East where Iran backed rebels remain highly active across the region &ndash; not least in the Red Sea where commercial ships remain under attack. These latter developments have also supported a rally in refined products with diesel and gasoline among the best performing futures markets this past week.</span></p> <p><span>In addition, the prospect of a March rate cut from the US Federal Reserve has all but disappeared as US economic data continues to surprise to the upside, thereby forcing the market to change its view on the timing, pace and depth of future US rate cuts. </span></p> <p><span> </span></p> <p><span> </span></p></div></div><div class="article-image"><img alt="9olh_wcu1" src="https://www.home.saxo/-/media/content-hub/images/2024/february/9olh_wcu1.png"/></div><div class="article-additional-rte"><div class="rte--output"><p><span> </span></p> <div> <p><span>Overall, the Bloomberg Commodity Total Return Index (BCOM), which tracks a basket of 24 major commodity futures spread across energy, metals and agricultural, traded close to unchanged on the week and down around 1.5% on the year. Besides cocoa which continued its parabolic rise, strong gains were seen across the refined product market as fuel cargoes avoid the Red Sea, thereby leaving millions of barrels stranded at sea for longer and reducing short-term availability.&nbsp;</span><strong ></strong></p> <h3 class="article-heading--3"><span>Natural gas under pressure from high inventories and a mild winter</span></h3> <span>At the bottom of the table, we find natural gas futures in the US and Europe, both under continued pressure from a mild winter and robust production. US natural gas hit a September 2020 low this week with the Henry Hub future slumping below $2 per MMBtu as mild weather reduces demand for heating while slowing the pace of stock draws. The latest weekly storage change report showed a 75 billion cubic feet withdrawal, well below the 193 billion cubic feet five-year average withdrawal for this period. In Europe, the TTF benchmark contract fell 7% to &euro;27 per MWh ($8.53/MMBtu) on a combination of fading winter (heating) demand, strong wind power generation and subdued industrial gas usage.&nbsp;<br /> <br /> </span> <h3 class="article-heading--3">Crude&rsquo;s bounce-back supported by product strength and Middle East focus</h3> <br /> <span >Crude oil prices continue to gyrate while staying mostly rangebound with the directional input being driven by the alternating focus between demand concerns weighing on prices and support from a not yet and limited risk of a supply disruption in the Middle East, and OPEC&rsquo;s efforts to support higher prices. The combination of these factors has, for the past few months, created a difficult trading environment with directional bets by speculators failing on several occasions, forcing trading positions, both long and short, to be adjusted on a regular basis, thereby creating moves that may not necessarily be supported by fundamentals.<br /> </span> <p><span>Overall, we maintain the view Brent and WTI</span><span> will probably remain rangebound, respectively around $80 and $75 per barrel during the first quarter but with disruption risks, OPEC+ production restraint, a tightening product market and incoming rate cuts potentially leaving the risk/reward skewed slightly to the upside. While the crude oil market remains rangebound, the fuel product market is showing some emerging strength with refinery margins, or so-called crack spreads, continuing to rise. Not least diesel prices which are being supported by global stock levels falling below their seasonal averages. Distillate supplies, which includes diesel, jet fuel and heating oil, have been disrupted by lower supply from Russia amid Ukrainian attacks on their refinery infrastructure and the attacks by Houthis on shipping vessels in the Red Sea and the Gulf of Aden. </span></p> </div></div></div><div class="article-image"><img alt="9olh_wcu2" src="https://www.home.saxo/-/media/content-hub/images/2024/february/9olh_wcu2.png"/></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>Platinum briefly rises above palladium for first time in five years</span></h3> <p><span>Palladium, down 44% during the past year, hit an August 2018 low at $880 this past week with slowing demand driving continued speculative selling from hedge funds. Despite a significant drop last year, rising prices from 2018 to 2022 led to the automobile sector starting to replace the palladium in auto catalyzers with cheaper platinum. The adoption of electric vehicles, hurting the demand for diesel-driven vehicles, has further worsened the prospect for a metal that is predominantly produced in South Africa and Russia as part a basket with other metals, limiting producers&rsquo; ability to slow palladium output despite prices falling below their costs. </span></p> <p><span>Platinum, meanwhile, trades down around 5% in the past twelve months and apart from the mentioned support from the automobile industry, platinum also derives support from its use in jewelry, as an investment metal through exchange-traded funds (ETFs) and other industries. These credentials have helped but not prevented platinum&rsquo;s discount to gold hitting record levels around $1150 per ounce. But overall, these developments have seen the price difference between these two platinum group metals disappear for the first time in five years.</span></p></div></div><div class="article-image"><img alt="9olh_wcu3" src="https://www.home.saxo/-/media/content-hub/images/2024/february/9olh_wcu3.png"/></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>Gold in stalemate between physical demand and &ldquo;paper&rdquo; selling</span></h3> <p><strong><span> </span></strong></p> <p><span>We retain a bullish outlook for gold and silver, but for now, both metals are likely to remain stuck until we get a better understanding about the timing, pace and depth of future US rate cuts. Until the first cut is delivered, the market may at times run ahead of itself, in the process building up rate cut expectations to levels that leave prices vulnerable to a correction. With that in mind, the short-term direction of gold and silver will continue to be dictated by incoming economic data and their impact on the dollar, yields and not least rate cut expectations. </span></p> <p><span>The combination of a cautious Fed and recent economic data strength has seen the short-term rates market going from pricing in more than six 25 basis points US rate cuts this year to less than five, while bets on the first cut being delivered at the March 20 meeting has slumped to less than 20%. All these developments highlight just how volatile markets can be in the run-up to a change in monetary policy. </span></p> <p><span>The fact gold has &lsquo;only&rsquo; lost around 2.5% year-to-date despite the stronger dollar, a pickup in bond yields and reduced rate cut expectations is likely to have been driven by geopolitical concerns related to tensions in the Middle East, and not least continued strong demand for physical gold from central banks and China&rsquo;s middle class attempting to preserve their dwindling fortunes caused by the property market crisis and one of the world&rsquo;s worst performing stock markets as well as a weakening yuan. In addition, the market has managed to deal with so-called &ldquo;paper&rdquo; selling with year-to-date outflows of 60 tons from ETFs and almost 200 tons sold by hedge funds in the futures market last month. </span></p> <p><span>As per the gold chart below, the market looks increasingly stuck with physical demand from central banks and retail demand in China and India, as well as Middle East concerns providing a soft floor under market around $2000.An upside break through $2065 looks difficult to achieve until we have a firmer idea about the mentioned timing, pace and depth of incoming</span><span> US rate cuts. The fact that both gold and silver recovered following an algo-led selling reaction to Thursday&rsquo;s stronger than expected US jobless claims print points to a market where the underlying demand remains firm.</span></p> <h3 class="article-heading--3"><span> <br /> </span></h3></div></div><div class="article-image"><img alt="9olh_wcu4" src="https://www.home.saxo/-/media/content-hub/images/2024/february/9olh_wcu4.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3">Cocoa's parabolic rise continues as chocolate producers are caught short</h3> <br /> Cocoa futures extended their parabolic surge this past week with a 20% gain driving the year-to-date gain of 44%. The March futures contract almost touched $6000 a ton on Friday, by far exceeding the previous $5000 per ton record from 1977. The ongoing surge has been driven by a worse-than-expected deficit in 2023-24, the third in a row, due to adverse developments in West Africa, the world&rsquo;s top producing region due to a) harmful intense dry winds, possibly linked to a strong El Ni&ntilde;o and b) pests and disease as farmers struggle to access expensive pesticides and fertilizers. <p><span>Arrivals of bags from cocoa farmers to ports in Ivory Coast are currently down by 40% on last year. With the mid-season crop after March now also looking challenged, it has raised concerns about the availability of cocoa to meet already agreed sales obligations, potentially leaving some of the major chocolate producers short changed, forcing them to enter the futures market to secure supplies. </span></p> <span>While this surge in cocoa prices is unlikely to be felt by consumers buying chocolate hearts for Valentines&rsquo; Day and bunnies and eggs for Easter this year, the impact will be felt later this year and next, as cocoa costs typically take 6-12 months to filter through to consumers. However, with sugar prices also on the rise we should expect more expensive chocolate prices and perhaps another round of &ldquo;Shrinkflation,&rdquo; when manufacturers reduce the weight of their products to maintain a perception of unchanged prices.<br /> <br /> </span> <h3 class="article-heading--3">Ample supply and speculative selling weighing on grains sector</h3> <br /> <span >The grains sector suffered a further decline with the Bloomberg Grains Spot Index, which tracks the front month performance of six grains and oilseed contracts, falling to a three-year low as ample supply and speculator selling continue to weigh on prices. A sector loss of 1.6% this past week lifted the year-on-year loss to 19%, with the latest selling being led by wheat and corn.</span> <p><span>This comes after a raft of monthly data from the US Department of Agriculture raised US ending stocks while sowing doubts about US wheat exports as Russia dumps prices in order to ship last year&rsquo;s record crop. In addition, the report also showed an unfounded worry about a negative weather impact on South American production of soybeans and corn. </span></p> <p><span>The latest Commitment of Traders report, covering the week to January 30, showed continued selling pressure from hedge funds with the net short across the grains and soy sector reaching 563,000 contracts, the strongest belief in falling prices since May 2019, with the nominal value of the corn and soybeans net short positions both exceeding $6 billion. </span></p></div></div><div class="article-image"><img alt="9olh_wcu5a" src="https://www.home.saxo/-/media/content-hub/images/2024/february/9olh_wcu5a.png"/></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>Uranium rally pauses following results from major producers</span></h3> <p><span>As we highlighted in our latest Commodity Weekly, the uranium market has been one of the top performing sectors during the past year &ndash; with the price of spot uranium rising to a 16-year high above $100 per pound </span><span>as the sector goes through a strong revival following years in the doldrum. </span><span>Nuclear power is seeing a growing global acceptance with major economies embracing nuclear energy as part of the green-energy transition.</span></p> <p><span>However, following the publication of quarterly results and 2024 production guidance from Kazatomprom and Cameco Corp, the world&rsquo;s top producers, the price of spot uranium and mining stocks ran into a long overdue profit taking this past week. A recently announced production downgrade from Kazatomprom had already been priced in, leaving the company with limited further price upside. </span><span>Cameco, meanwhile, traded lower after its adjusted earnings per share missed fourth quarter analyst estimates, and it kept its 2024 guidance in line with consensus. Cameco has locked up a large amount of its future sales at low fixed prices, meaning that a higher spot uranium price in the short term would be negative for the company, especially if production falls short &ndash; forcing it to meet its sales obligation by entering the spot market at higher prices. </span></p> <p><span>In the short term, the price action may be exposed to selling from an army of recent nuclear converts disappointed by the market&rsquo;s inability to continue higher in a straight line. As we highlighted previously, the emergence of, and growing popularity of, investment vehicles holding physical uranium on behalf of investors, have contributed to the current tightness, in the process supporting the spot price as well as the stock market performance of mining companies, reactor builders and fuel makers. The flows in and out of these investment vehicles will continue to help dictate the price, both up, and more recently down. </span></p></div></div><div class="article-additional-rte"><div class="rte--output"><hr /> <strong></strong> <p><strong><span>Commodities articles:</span></strong></p> <p><span>9 Feb 2024: <a href="https://www.home.saxo/content/articles/podcast/podcast-9-feb-2024---the-year-of-metals-09022024">Podcast: Year of the metals</a><br /> 7 Feb 2024: <a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024">Crude oil supported by tightening fuel outlook</a><br /> 6 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024"><strong><span>Gold and silver turn defensive on reduced Fed rate-cut optimism</span></strong></a></span><span><br /> 2 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a></span><span><br /> 1 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a></span><span><br /> 30 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/gold-and-silver-look-to-fomc-for-direction-30012024"><strong><span>Gold and silver look to FOMC for direction</span></strong></a></span><span><br /> 29 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/coffee-29012024"><strong><span>Video: Unpacking the reasons behind soaring coffee prices</span></strong></a></span><span><br /> 26 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---26-jan-2024-26012024"><strong><span>Commodity weekly: Back in black supported by China stimulus</span></strong></a></span><span><br /> 25 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/grains-up-on-short-covering-softs-supported-by-tight-supply-25012024"><strong><span>Grains up on short covering; softs supported by tight supply</span></strong></a></span><span><br /> 24 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-24012024"><strong><span>&nbsp;Disruption risks drive specs into Brent; distorted EIA report up next</span></strong></a></span><span><br /> 23 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024"><strong><span>Silver and copper in focus after recent declines</span></strong></a></span><span><br /> 19 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a></span><span><br /> 17 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a></span><span><br /> 16 Jan 2024:</span><span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a></span><span><br /> 12 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a></span><span><br /> 9 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a></span><span><br /> 5 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a></span><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> 21 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a><span><br /> 19 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a><span><br /> 14 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a><span><br /> 13 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a><span><br /> 12 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a><span><br /> 1 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a><span><br /> </span><span><br /> <strong><br /> <strong><span>Previous "Commitment of Traders" articles</span></strong></strong><br /> </span></p> <p><span>5 Feb 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024"><strong><span>COT: Speculators chase false crude break; grain short extends further</span></strong></a><span><br /> 29 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024"><strong><span>&nbsp;COT: Squeeze risks after funds sold into rising commodity markets</span></strong></a><span><br /> 22 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><strong><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></strong></a><span><br /> 15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><span><br /> 18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a><span><br /> </span></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Gas Oil</span> <span>Crude Oil</span> <span>Heating Oil</span> <span>Oil and Gas</span> <span>Oil</span> <span>Copper</span> <span>Agriculture</span> <span>China</span> <span>Highlighted articles</span> <span>Wheat</span> <span>Iron Ore</span> <span>Natural Gas</span></div>Fri, 09 Feb 2024 13:30:00 Z2024-03-27T10:51:38Z{F6B25951-260A-4922-9126-20BF9587C5A5}https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-07022024Ole Hansenproduct-commoditiesInflationFederal Reservecommodity-crude oilcommodity-gas oilcommodity-heating oilOilsector-Oil and Gasplace-lc/cnCrude oil supported by tightening fuel outlook<div class="article-excerpt">Crude oil prices continue to gyrate while staying mostly rangebound </div><div class="article-rte"><div class="rte--output"><span></span> <div> <p paraid="1716790097" paraeid="{af15bee3-dd0c-472a-88c6-3ecc647703b6}{121}"><span data-contrast="auto">Crude oil prices continue to gyrate while staying mostly rangebound with the directional input being driven by the alternating focus between demand concerns weighing on prices and support from a not yet and most likely very limited risk of a supply disruption in the Middle East, and OPEC&rsquo;s efforts to support higher prices. The combination of these has for the past few months created a very difficult trading environment with directional bets by speculators failing on several occasions, forcing trading positions, both long and short, to be adjusted on a regular basis.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1934703863" paraeid="{af15bee3-dd0c-472a-88c6-3ecc647703b6}{157}"><span data-contrast="auto">The last couple of weeks has been a classic example of this with prices surging above previous resistance levels following an attack on US forces in Jordan by Iranian backed militants, only to deflate after the US adopted a measured response and a Qatar mediated plan for a cease-fire in Gaza emerged. This roller coaster ride was in part fueled by technical buying from speculators leading to an end of January rapid accumulation of long positions before the slump back below $75 in WTI and $80 in Brent triggered another round of long liquidation.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="472465366" paraeid="{af15bee3-dd0c-472a-88c6-3ecc647703b6}{203}"><span data-contrast="auto">Overall, we maintain the view Brent and WTI</span><span data-contrast="auto"> will likely remain rangebound, respectively around $80 and $75 per barrel during the first quarter but with disruption risks, OPEC+ production restraint, and incoming rate cuts potentially leaving the risk/reward skewed slightly to the upside. The biggest downside risk being a disunited OPEC+ leading to a collapse in the current agreement to keep production down, and the upside from a major geopolitical event disrupting the flow of crude oil and gas from the Middle East.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1923339412" paraeid="{af15bee3-dd0c-472a-88c6-3ecc647703b6}{227}"><span data-contrast="auto">While the crude oil market remains rangebound the fuel product market is showing some emerging strength with refinery margins, or so-called crack spreads, continuing to rise. Not least diesel prices which are being supported by global stock levels falling below their seasonal averages. Distillate supplies, which includes diesel, jet fuel and heating oil, have been disrupted by Ukraine's drone attacks on petroleum refineries in Russia and by Houthi attacks on shipping in the Red Sea and the Gulf of Aden. The latter have led to the re-routing of east-west tankers from the Red Sea and the Suez Canal to the much longer route around Africa, in the process tying up millions of barrels of diesel and gasoil on the water for longer.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="7olh_oil1" src="https://www.home.saxo/-/media/content-hub/images/2024/february/7olh_oil1.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <div> <p paraid="1213633010" paraeid="{c3c309be-526a-4690-bcc0-e5f135138e13}{19}"><span data-contrast="auto">A three-day bounce in crude oil, driven by a combination of the mentioned support from rising fuel prices and hedge funds having finished exiting wrongfooted longs, was given some additional support on Wednesday after the US Energy Information Administration sowed doubt about the outlook for US production growth. In their monthly Short-term Energy Outlook (</span><a href="https://www.eia.gov/outlooks/steo/report/index.php" target="_blank" rel="noopener noreferrer"><span data-contrast="none">STEO</span></a><span data-contrast="auto">) the EIA said it did not expect that the record production of 13.3 million b/d reached in December, and temporarily cut to $12.6 million b/d in January due to shut-ins from frigid weather, would be exceeded until February 2025.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1938490089" paraeid="{c3c309be-526a-4690-bcc0-e5f135138e13}{78}"><span data-contrast="auto">The forecast stands in contrast to that of the International Energy Agency who sees continued non-OPEC supply growth being led by the US, Canada, Brazil and Guyana. Even OPEC in their latest update saw non-OPEC supply in 2024 rise by 1.34 million barrels/day with nearly half the increased coming from the US. Note: </span><a href="https://www.opec.org/opec_web/en/publications/338.htm" target="_blank" rel="noopener noreferrer"><span data-contrast="none">OPEC</span></a><span data-contrast="auto"> and </span><a href="https://www.iea.org/reports/oil-market-report-january-2024" target="_blank" rel="noopener noreferrer"><span data-contrast="none">IEA</span></a><span data-contrast="auto"> will publish their monthly reports next week on February 13 and 15.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1525559400" paraeid="{c3c309be-526a-4690-bcc0-e5f135138e13}{114}"><span data-contrast="auto">With US production growth potentially stalling, the OPEC+ group of producers, currently keeping 2.2 million barrels/day off the market, should find it easier to manage production and support (higher) prices going forward, especially with global demand expected to rise around 1.5 million b/d, supported by a robust US economy and Beijing stepping up efforts to support the Chinese economy. For now, however, these developments do not alter our view that rangebound market conditions will prevail in the short-term.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="2051412029" paraeid="{c3c309be-526a-4690-bcc0-e5f135138e13}{148}"><span data-contrast="auto">Later today, the EIA will publish its weekly inventory report (insert below) and given the current strength in refinery margins, changes in gasoline and distillate stocks will be watched closely. According to the American Petroleum Institute (API) who released their report last night, the market can expect another sizable distillate draw being offset by an equal strong rise in gasoline stocks. If confirmed by the EIA it would drive gasoline stocks to a June 2020 high and distillates some 7% below the five-year average. Crude oil stocks meanwhile are expected to show a rise which will be in line with the seasonal behaviour.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="973051025" paraeid="{c3c309be-526a-4690-bcc0-e5f135138e13}{202}"><span data-contrast="auto">WTI crude oil continues to trade within the uptrend that was established in early December when the Red Sea attacks began. However, the recent strong rally and subsequent steep decline highlights a market struggling for direction. The ascending trend line is currently providing support around $72.40 while a move above $74, the 21-day moving average, may signal a return to neutral.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div></div></div><div class="article-image"><img alt="7olh_oil4" src="https://www.home.saxo/-/media/content-hub/images/2024/february/7olh_oil4.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>23 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024">Silver and copper in focus after recent declines</a><br /> 19 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a></span><span><br /> 17 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a></span><span><br /> 16 Jan 2024:</span><span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a></span><span><br /> 12 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a></span><span><br /> 9 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a></span><span><br /> 5 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a></span><span><br /> 4 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a></span><span><br /> 4 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a></span><span><br /> 21 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a></span><span><br /> 19 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a></span><span><br /> 14 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a></span><span><br /> 13 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a></span><span><br /> 12 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a></span><span><br /> 1 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a></span><span><br /> 30 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a></span><span><br /> 23 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a></span><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a></span><span><br /> 22 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a></span><span>?<br /> 17 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a></span><span><br /> 16 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-16-nov-2023---commodities-16112023"><strong><span>Podcast: Silver comeback, watch OPEC as crude oil slides lower</span></strong></a></span><span><br /> 16 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-weakness-adds-focus-to-upcoming-opec-meeting-16112023"><strong><span>Crude oil weakness adds focus to upcoming OPEC meeting</span></strong></a></span><span><br /> 15 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/soft-cpi-lifts-gold-and-beaten-down-silver-and-platinum-15112023"><strong><span>Soft CPI lifts gold and beaten down silver and platinum</span></strong></a></span><span><br /> 12 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/copper-update---21-november-2023-21112023"><strong><span>Copper supported by green transformation demand and peak rate speculation</span></strong></a></span><span>&nbsp;<br /> 10 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---10-november-2023-10112023"><strong><span>Commodity weekly: Crude oil risks overshooting the downside</span></strong></a></span></p> <p><strong><span>Previous "Commitment of Traders" articles<br /> <br /> </span></strong><span>22 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024">COT: Commodities short-selling on the rise amid China woes and Fed caution</a><br /> 15 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a></span><span><br /> 8 Jan 2024<strong>:&nbsp;</strong></span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a></span><strong><span><br /> </span></strong><span>18 Dec 2023:</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a></span><span><br /> 11 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a></span><span><br /> 4 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a></span><span><br /> 20 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023"><strong><span>COT: Crude selling slows, grains in demand</span></strong></a></span><span><br /> 14 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023"><strong><span>COT: Crude long slumps; agriculture sector in demand</span></strong></a></span></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Inflation</span> <span>Federal Reserve</span> <span>Crude Oil</span> <span>Gas Oil</span> <span>Heating Oil</span> <span>Oil</span> <span>Oil and Gas</span> <span>China</span></div>Wed, 07 Feb 2024 11:30:00 Z2024-03-27T10:51:39Z{2E609972-6A7E-4C32-B65C-CD14AC856F7A}https://www.home.saxo/content/articles/commodities/us-rate-cut-delay-drives-gold-below-2000-06022024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal ReserveMiningFocus InflationWeekly NewsletterGold and silver turn defensive on reduced Fed rate-cut optimism<div class="article-excerpt">We keep a bullish outlook for gold and silver, but for now, both metals are likely to remain stuck until we get a better understanding about the timing, pace and depth of future US rate cuts.</div><div class="article-rte"><div class="rte--output"><div> <p paraid="17884607" paraeid="{99df4d6d-324b-4080-a24a-c555cfcf8e19}{123}"><span data-contrast="auto">We keep a bullish outlook for gold and silver, but for now, both metals are likely to remain stuck until we get a better understanding about the timing, pace and depth of future US rate cuts. Until the first cut is delivered, the market may at times run ahead of itself, in the process building up rate cut expectations to levels that leave prices vulnerable to a correction. With that in mind, the short-term direction of gold and silver will continue to be dictated by incoming economic data and their impact on the dollar, yields and not least rate cut expectations.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="492358320" paraeid="{99df4d6d-324b-4080-a24a-c555cfcf8e19}{153}"><span data-contrast="auto">During the past week, the short-term rates market has gone from pricing in more than six 25 basis points US rate cuts this year to less than five, while bets on the first cut being delivered at the March 20 meeting has slumped to less than 20%. All developments that highlight just how volatile markets can be in the runup to a change in monetary policy. Following last week&rsquo;s FOMC meeting Fed Chair Powell said it was not likely that the committee will reach a level of confidence in time for the March meeting to begin rate cuts. He went on to say that given economic growth at a &ldquo;solid pace,&rdquo; a "strong" labor market, and continued declines in inflation, the Fed can eventually reduce interest rates carefully.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1745560426" paraeid="{99df4d6d-324b-4080-a24a-c555cfcf8e19}{215}"><span data-contrast="auto">With these cautious words still ringing, Friday&rsquo;s strong US job report and Monday&rsquo;s rebound in ISM Services employment and prices paid brought home the realization that rate cuts may not be delivered at the expected pace, and the market impact has been clear with broad dollar strength taking the Bloomberg Dollar index, which also includes an under-pressure yuan, to a November high while US 10-year Treasury yields surged back towards 4.2% resistance after being rejected near 3.8% last week.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1708624949" paraeid="{99df4d6d-324b-4080-a24a-c555cfcf8e19}{249}"><span data-contrast="auto">Precious metal traders trying to navigate this constantly changing outlook has become a relatively painful exercise, especially for those looking for short-term momentum opportunities. As per the gold chart below, the market looks increasingly stuck with physical demand from central banks and retail demand in China and India, as well as Middle East concerns providing a soft floor under market around $2000 while an upside break through $2065 looks difficult until we have a firmer idea about the mentioned timing, pace and depth of incoming rate cuts.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <p><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <div> <div> <h3><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="6olh_gld2" src="https://www.home.saxo/-/media/content-hub/images/2024/february/6olh_gld2.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><span data-contrast="auto"><a href="https://www.saxotrader.com/sim/instant-demo/InstantDemo-EN-GL/page/product/FxSpot/8177?activeTab=overview&amp;cmpid=copy_link_platform_sharing"></a></span> <div> <div> <p paraid="725824295" paraeid="{86a2e30a-b608-4973-b81e-087305d97c8d}{53}"><span data-contrast="auto">Our gold monitor below highlights some of the recent developments, not least gold&rsquo;s ability to stay supported despite the recent dollar strength and lowering of rate cut expectations. On a correlation basis the movements in real yields and the SOFR futures contracts currently command the highest negative correlation. The fact gold has &lsquo;only&rsquo; lost around 2% year-to-date despite the stronger dollar and a pickup in bond yields and reduced rate cut expectations is likely to have been driven by geopolitical concerns related to tensions in the Middle East, and not least continued strong demand for physical gold from central banks and China&rsquo;s middle class attempting to preserve their dwindling fortunes caused by the property market crisis and one of the world&rsquo;s worst performing stock markets as well as a weakening yuan.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1027387563" paraeid="{86a2e30a-b608-4973-b81e-087305d97c8d}{83}"><span data-contrast="auto">In their 2023 review, the World Gold Council described another year of blistering demand, led by central bank buying and jewelry consumption. Central bank buying reached 1,037 tons, just 45 tons short of the 2022 record, while jewelry consumption despite the high price environment held steady at 2,093 tons. According to the report, global ETFs saw a third consecutive annual outflow of 244 tons compared with 110 tons in 2022 as asset managers and other investors looked elsewhere amid the rising funding and opportunity cost compared to holding a position in bonds.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1228389326" paraeid="{86a2e30a-b608-4973-b81e-087305d97c8d}{133}"><span data-contrast="auto">Meanwhile, following four weeks of net selling, managed money traders such as hedge funds and CTA&rsquo;s held a reduced 72k lots or 204 tons long on January 30, almost half the position that was held at the start of the year. Again, the limited (negative) price impact of this selling highlights an underlying physical demand which is not visible in the so-called &lsquo;paper&rsquo; market which includes ETFs where outflows since the beginning of the year have reached 54 tons.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <h3 paraid="1033937941" paraeid="{40b2c94f-ca78-4b98-88a6-b55cc697fffa}{234}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <div> <p paraid="1425391661" paraeid="{7ae875e5-8831-4f3d-9c4d-e0eec23f9053}{112}"><span data-ccp-props="{'134233117':false,'134233118':false,'335559738':0,'335559739':0}"></span></p> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></div></div><div class="article-image"><img alt="6olh_gld1" src="https://www.home.saxo/-/media/content-hub/images/2024/february/6olh_gld1.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <p paraid="1989187661" paraeid="{a61952c4-dd68-464d-a35d-bd8ec583e78c}{239}"><span data-contrast="auto"><span data-contrast="auto"><span data-contrast="auto">Silver, down around&nbsp;6% year-to-date, once again trades heavy as weakness from industrial metals spill over. It highlights a metal where the main directional input is supplied by movements in gold and copper with the latter currently being negatively affected by a weak yuan amid concerns about the economic outlook in China. Support just below $22 is the key to prevent an even bigger rout, while resistance has been set up around $23.25 ahead of the 50- and 200-day moving averages.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></span></p> </div></div></div><div class="article-image"><img alt="6olh_gld3" src="https://www.home.saxo/-/media/content-hub/images/2024/february/6olh_gld3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <strong>Commodities articles:</strong> <p><span><br /> 2 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024"><strong><span>Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</span></strong></a></span><span><br /> 1 Feb 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024"><strong><span>Commodities: January performance and ETF flows</span></strong></a></span><span><br /> 30 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/gold-and-silver-look-to-fomc-for-direction-30012024"><strong><span>Gold and silver look to FOMC for direction</span></strong></a></span><span><br /> 29 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/coffee-29012024"><strong><span>Video: Unpacking the reasons behind soaring coffee prices</span></strong></a></span><span><br /> 26 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---26-jan-2024-26012024"><strong><span>Commodity weekly: Back in black supported by China stimulus</span></strong></a></span><span><br /> 25 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/grains-up-on-short-covering-softs-supported-by-tight-supply-25012024"><strong><span>Grains up on short covering; softs supported by tight supply</span></strong></a></span><span><br /> 24 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-24012024"><strong><span>&nbsp;Disruption risks drive specs into Brent; distorted EIA report up next</span></strong></a></span><span><br /> 23 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024"><strong><span>Silver and copper in focus after recent declines</span></strong></a></span><span><br /> 19 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a></span><span><br /> 17 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a></span><span><br /> 16 Jan 2024:</span><span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a></span><span><br /> 12 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a></span><span><br /> 9 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a></span><span><br /> 5 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a></span><span><br /> 4 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a></span><span><br /> 21 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a></span><span><br /> 19 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a></span><span><br /> 14 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a><span><br /> 13 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a><span><br /> 12 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a><span><br /> 1 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a><span><br /> 30 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a><span><br /> 23 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a><span><br /> 22 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a><span>?<br /> 17 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a><span><br /> </span><strong ><br /> Previous "Commitment of Traders" articles</strong><span><br /> </span></p> <p><span>5 Feb 2024: <a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024">COT: Speculators chase false crude break; grain short extends further</a><br /> </span><span >29 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024" ><strong>&nbsp;COT: Squeeze risks after funds sold into rising commodity markets</strong></a><br /> <span >22 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024" ><strong>COT: Commodities short-selling on the rise amid China woes and Fed caution</strong></a><br /> <span >15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024" ><strong>COT: Grains sector slump continues; Mideast risks lift crude demand</strong></a><br /> <span >8 Jan 2024<strong>:&nbsp;</strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024" ><strong>COT: Weakest commodities conviction since 2015</strong></a><br /> <span >18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023" ><strong>COT: Crude long hits 12-year low ahead of FOMC bounce</strong></a><br /> <span >11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023" ><strong>COT: An under owned commodity sector raising risk of an upside surprise in 2024</strong></a><br /> <span >4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023" ><strong>COT: Speculators add further fuel to gold rally</strong></a><br /> <span >20 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023" ><strong>COT: Crude selling slows, grains in demand</strong></a><br /> <span >14 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023" ><strong>COT: Crude long slumps; agriculture sector in demand</strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Mining</span> <span>Focus Inflation</span> <span>Weekly Newsletter</span></div>Tue, 06 Feb 2024 10:25:00 Z2024-03-27T10:51:39Z{A1458C9C-963F-4775-8B9A-F305052148C4}https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---5-feb-2024-05022024Ole Hansenproduct-commoditiesCOT Commoditiescommodity-crude oilcommodity-natural gascommodity-goldcommodity-silvercommodity-coppercommodity-platinumcommodity-corncommodity-sugarcommodity-coffeecommodity-gasolinecommodity-palladiumcommodity-wheatcommodity-cocoacommodity-cottoncommodity-cattlesector-gics-1010product-forexCOT FXforex-eurusdforex-usdjpyforex-audusdforex-usdcadforex-usdchfforex-gbpusdforex-nzdusdsubject-is/fin.stpbondBonds Inspirationproduct-bondsproduct-forexEn hurtig tankeCOT: Speculators chase false crude breakout; grain short extends further<div class="article-excerpt">Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to last Tuesday, January 30</div><div class="article-rte"><div class="rte--output"><em>Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities while in forex we use the broader measure called non-commercial.</em></div></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>What is the Commitments of Traders report?</span></h3> <br /> <p>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.</p> <p>Commodities: Producer/Merchant/Processor/User, Swap dealers,&nbsp;<span>Managed Money</span>&nbsp;and other<br /> Financials: Dealer/Intermediary; Asset Manager/Institutional;&nbsp;<span>Leveraged Funds</span>&nbsp;and other<br /> Forex: A broad breakdown between commercial and&nbsp;<span>non-commercial</span>&nbsp;(speculators)</p> <p>The main reasons why we focus primarily on the behavior of speculators, such as hedge funds and trend-following CTA's are:</p> <ul> <li>They are likely to have&nbsp;<span>tight stops</span>&nbsp;and&nbsp;<span>no underlying exposure</span>&nbsp;that is being hedged</li> <li>This makes them&nbsp;<span>most reactive to changes</span>&nbsp;in fundamental or technical price developments</li> <li>It provides views about&nbsp;<span>major trends</span>&nbsp;but also helps to decipher when a&nbsp;<span>reversal</span>&nbsp;is looming</li> </ul> <p>Do note that&nbsp;<span >this group tends to <strong>anticipate, accelerate, and amplify</strong> price changes that have been set in motion by <strong>fundamentals</strong>. Being followers of momentum, this strategy often sees this group of traders buy into strength and sell into weakness, meaning that they are often found holding the biggest long near the peak of a cycle or the biggest short position ahead of a through in the market.</span></p></div></div><div class="article-additional-rte"><div class="rte--output"><span></span> <div> <span></span> <span></span> <div> <span></span> <div> <div> <div> <div> <div> <div> <div> <span></span> <div> <div> <span data-contrast="none"></span><span></span> <div> <span data-contrast="none"></span> <div> <span data-contrast="none"></span> <div> <span></span> <span></span> <div> <span></span> <div><span>This summary highlights </span><span>futures</span><span> positions and changes made by hedge funds across commodities</span><span> and </span><span>forex</span><span> </span><span>in the</span><span> </span><span>week to </span><span>last </span><span>Tuesday</span><span>, </span><span>January</span><span> </span><span>30</span><span>. A week that </span><span>covered market developments </span><span>ahead of the plunge in </span><span>regional lender NYBC</span><span>,</span><span> </span><span>the </span><span>F</span><span>OMC meeting where Fed chair Powell said a March rate cut was very unlikely</span><span> and Friday&rsquo;s bumper US job report</span><span>. Leading up to these events which </span><span>helped</span><span> strengthen the dollar further while sending Treasury yields on a </span><span>roller coaster ride, financial markets </span><span>had </span><span>enjoyed</span><span> another </span><span>strong week with risk appetite being supported by strong earnings and contracting bond yields. Commodities enjoyed a strong week as well </span>with all sectors except grains recording gains.&nbsp;<br /> <h3 class="article-heading--3">Commodities</h3> </div> <div> <p paraid="1549834780" paraeid="{d93a7abb-a804-4682-83c3-aa12a18bb6c2}{135}"><span data-contrast="auto">The Bloomberg Commodity index, which tracks a basket of 24 major futures markets split between energy (30.1%), metals (34.2%) and agriculture (35.7%), traded higher for a second week with broad gains being only partly offset by weakness in natural gas and the soybean complex. Following four weeks of net selling, speculators, such as hedge funds and CTA&rsquo;s finally responded to these improved developments by hitting the &lsquo;buy&rsquo; button, leading to a doubling of their net long from a September 2019 low in the prior week.&nbsp;<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="1702274019" paraeid="{d93a7abb-a804-4682-83c3-aa12a18bb6c2}{209}"><span data-contrast="auto"><br /> Buying was concentrated in energy, excluding natural gas, copper, sugar and livestock while the grains sector continued to be sold with the combined net short rising to near a five-year high. Precious metals were mixed with all the ducks not yet lined up in a row to support a breakout of the established ranges, in gold between $2000 and $2065.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div> <div> <p paraid="1815481085" paraeid="{9dc17bdc-2b11-4bfd-b9b9-624ec6b0c42a}{183}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div> </div> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}" ></span></div> </div> <p paraid="1396398248" paraeid="{a9890f65-bd09-43ce-b941-e232248f0c46}{133}"><span data-contrast="auto"> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p><span> </span></p> <p><span> </span></p> </div> </div> </div> <div> <span data-ccp-props="{'201341983':0,'335559740':259}" ></span></div> </div> </div> <div> <p paraid="739880928" paraeid="{6472d595-91b7-4440-89e9-890d4acd9c8e}{166}"><span data-contrast="none"> </span></p> </div> <p><span> </span></p> </div> <div> <p paraid="1053527918" paraeid="{f64664da-5092-46b8-866f-464e46bdf07a}{149}"><span data-ccp-props="{}"></span></p> </div> </div> </div> </div></div></div><div class="article-image"><img alt="5olh_cot" src="https://www.home.saxo/-/media/content-hub/images/2024/february/5olh_cot.png"/></div><div class="article-image"><img alt="5olh_cot2" src="https://www.home.saxo/-/media/content-hub/images/2024/february/5olh_cot2.png"/></div><div class="rte--output">Energy: The combined crude oil net long jumped 69k contracts - the most since mid-December - to 412k contracts on technical buying following a geo-tension supported upside break. However, failure to keep the geopolitical risk premium inflated after the reporting week ended, helped drive the end of week slump. Diesel was in demand with the gas oil long doubling while net selling of natural gas continued. </div><br/><div class="article-image"><img alt="5olh_cot3" src="https://www.home.saxo/-/media/content-hub/images/2024/february/5olh_cot3.png"/></div><div class="rte--output">Metals: A mixed week with rangebound gold seeing a fourth weekly reduction to 72k contacts, lowest in 3-1/2 months, while silver length – supported by China/copper strength – flipped back to a net long. Copper enjoyed its best week of buying om four years after the net short was cut by 89% to near neutral at -3k.</div><br/><div class="article-image"><img alt="5olh_cot4" src="https://www.home.saxo/-/media/content-hub/images/2024/february/5olh_cot4.png"/></div><div class="rte--output">Broad grains sector selling extended to a seventh week, during which time the BCOM grains index slumped by 8%. In the last reporting week, the hedge fund net short reached a fresh May 2019 high at 563k lot with wheat so far, the only contract showing signs of easing selling pressure. The nominal value of the corn and soybeans net shorts both exceeding $6 bn</div><br/><div class="article-image"><img alt="5olh_cot5" src="https://www.home.saxo/-/media/content-hub/images/2024/february/5olh_cot5.png"/></div><div class="rte--output">The softs sector saw profit taking in cocoa as the price approached a 46 year high, sugar buyers continued to play catch up following recent strong gains, while the Arabica coffee long almost reached a two-year high.</div><br/><div class="article-image"><img alt="5olh_cot6" src="https://www.home.saxo/-/media/content-hub/images/2024/february/5olh_cot6.png"/></div><div class="rte--output">In forex, the speculative flows were mixed with selling of JPY and AUD being offset by demand for CAD, CHF and GBP while the euro positioning was little changed on the week. Overall, the gross dollar short versus eight IMM futures and DXY saw a small increase, the first in four weeks to $5.5 billion</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>2 Feb 2024: <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024">Commodity weekly: Tight supply adds fuel to uranium and cocoa rally</a><br /> 1 Feb 2024: <a href="https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024">Commodities: January performance and ETF flows</a><br /> 30 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/gold-and-silver-look-to-fomc-for-direction-30012024">Gold and silver look to FOMC for direction</a><br /> 29 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/coffee-29012024">Video: Unpacking the reasons behind soaring coffee prices</a><br /> 26 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---26-jan-2024-26012024"><strong><span>Commodity weekly: Back in black supported by China stimulus</span></strong></a></span><span><br /> 25 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/grains-up-on-short-covering-softs-supported-by-tight-supply-25012024"><strong><span>Grains up on short covering; softs supported by tight supply</span></strong></a></span><span><br /> 24 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-24012024"><strong><span>&nbsp;Disruption risks drive specs into Brent; distorted EIA report up next</span></strong></a></span><span><br /> 23 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024"><strong><span>Silver and copper in focus after recent declines</span></strong></a></span><span><br /> 19 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a></span><span><br /> 17 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a></span><span><br /> 16 Jan 2024:</span><span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a></span><span><br /> 12 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a></span><span><br /> 9 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a></span><span><br /> 5 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a></span><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> 21 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a><span><br /> 19 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a><span><br /> 14 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a></span><span><br /> 13 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a></span><span><br /> 12 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a></span><span><br /> 1 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a></span><span><br /> 30 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a></span><span><br /> 23 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a></span><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a></span><span><br /> 22 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a><span>?<br /> 17 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a></span><span><br /> <br /> <br /> </span></p> <p><strong><span>Previous "Commitment of Traders" articles</span></strong><strong><span><br /> <br /> </span></strong><span>29 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024"><strong><span>&nbsp;COT: Squeeze risks after funds sold into rising commodity markets</span></strong></a><span><br /> 22 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><strong><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></strong></a><span><br /> 15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><strong><span><br /> </span></strong><span>18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a><span><br /> 20 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023"><strong><span>COT: Crude selling slows, grains in demand</span></strong></a><span><br /> 14 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023"><strong><span>COT: Crude long slumps; agriculture sector in demand</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>COT Commodities</span> <span>Crude Oil</span> <span>Natural Gas</span> <span>Gold</span> <span>Silver</span> <span>Copper</span> <span>Platinum</span> <span>Corn</span> <span>Sugar</span> <span>Coffee</span> <span>Gasoline</span> <span>Palladium</span> <span>Wheat</span> <span>Cocoa</span> <span>Cotton</span> <span>Cattle</span> <span>Energy (Sector)</span> <span>Forex</span> <span>COT FX</span> <span>EURUSD</span> <span>USDJPY</span> <span>AUDUSD</span> <span>USDCAD</span> <span>USDCHF</span> <span>GBPUSD</span> <span>NZDUSD</span> <span>Government Bonds</span> <span>Bonds nspiration</span> <a href="https://www.home.saxo/insights/news-and-research/bonds">Bonds</a> <a href="https://www.home.saxo/insights/news-and-research/forex">Forex</a> <span>En hurtig tanke</span></div>Mon, 05 Feb 2024 10:20:00 Z2024-03-27T10:51:44Z{E7B1BADC-EC91-4056-A0FB-838171396C3A}https://www.home.saxo/content/articles/commodities/commodity-weekly---2-feb-2024-02022024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal Reservecommodity-gas oilcommodity-crude oilcommodity-heating oilsector-Oil and GasOilcommodity-copperAgricultureplace-lc/cnHighlighted articlescommodity-wheatIron Orecommodity-natural gasCommodity weekly: Tight supply adds fuel to uranium and cocoa rally<div class="article-excerpt">The commodities sector gave back some of its recent strong gains this past week with losses being driven by industrial metals and energy, as talks of a ceasefire in Gaza deflated the geopolitical risk premium. Cocoa and uranium both surged high on a tightening supply outlook</div><div class="article-rte"><div class="rte--output"><p><span>The commodities sector gave back some of its recent strong gains this past week with losses being driven by industrial metals &ndash; as the boost from the recent cut in China&rsquo;s reserve ratio faded &ndash; and energy, as talks of a ceasefire in Gaza deflated the geopolitical risk premium. Precious metals, meanwhile, received an initial boost from a sharp fall in US Treasury yields driven by fresh concerns over US regional banks and their exposure to commercial real estate, and following the US Federal Reserve&rsquo;s signal that the next move in rates would be lower, albeit perhaps not as soon as the market had hoped for, not least following another very strong US job report for January which showed a big rise in new jobs and rising wages. </span></p> <p><span>Overall, the Bloomberg Commodity Total Return Index (BCOM), which tracks a basket of 24 major commodity futures spread across energy, metals and agricultural, trades down around 1.6% on the week and 1% on the year. Among those commodities that are included in the BCOM index, the top performers are cocoa, cotton and wheat, while the bottom five are all related to the energy sector. </span></p> <p><span> </span></p> <p><span> </span></p></div></div><div class="article-image"><img alt="2olh_wcu0" src="https://www.home.saxo/-/media/content-hub/images/2024/february/2olh_wcu0.png"/></div><div class="article-additional-rte"><div class="rte--output"><p><span> </span></p> <div> <h3 class="article-heading--3"><span>Cocoa breaks $5000 per ton for the first time since 1977</span></h3> <p><span>The agriculture sector trades mixed with the grains sector showing continued signs of stabilizing, with the biggest short positions held by speculators across six grain and soy contracts since 2019 also providing some emerging support. The softs sector, by far the best performing sector during the last twelve months, traded higher for a fourth week, reaching a ten-year high in the process. The latest strength is supported by a parabolic rise in cocoa, </span><span>surging above $5000 per ton for the first time since 1977. Cocoa prices have now more than doubled during the past year, driven by low supplies from Ivory Coast and Ghana, the world&rsquo;s two biggest producers. The current season which began in October has so far, due to dry weather conditions, seen arrivals to ports in Ivory Coast trail last year by around 36%, with the latest bout of drought potentially hurting next season's bigger main crop, thereby keeping the world in a prolonged deficit.</span><span ></span></p> <h3 class="article-heading--3"><span>Uranium sector strength on growing global acceptance</span></h3> <p><span>The top performer this past week was spot uranium, which rose strongly after Kazatomprom, the world's top producer, cut their 2024 production guidance as expected by 14.2%,</span><span> due to limited access to sulphuric acid which is used as the leaching agent to dissolve the uranium oxides from the ore, allowing for the recovery of uranium. During the past year, spot uranium has more than doubled to reach a 16-year high above $100 per pound as the sector goes through a strong revival following years in the doldrum. </span><span>Nuclear power is seeing a growing global acceptance with major economies embracing nuclear energy as part of the green-energy transition. </span></p> <p><span>With demand on the rise, prices have surged on supply risks, including lower production guidance from producers and geopolitical tensions affecting uranium-producing countries. In addition, the emergence of and growing popularity of investment vehicles holding physical uranium on behalf of investors, have also contributed to the current tightness, in the process supporting the spot price as well as a the stock market performance of mining companies, reactor builders and fuel makers. </span></p> <p><span>While the focus in terms of delivering strong returns has been on the tech-heavy Nasdaq 100 and its 12-month gain of around 35%, the Global X Uranium ETF, a $3 billion market cap ETF that tracks a basket of companies involved in uranium mining and the production of nuclear components, has returned close to 40% during this time. The Sprott Physical Uranium Trust, which holds all its assets in physical uranium trades up 93% during the past year and since its inception a couple of years ago it has grown to become a $6.2 billion titan. Together with London-based Yellow Cake Plc, their rapid growth has probably been adding fuel to the rally by further tightening spot market availability.</span></p> <p><em><span>Table highlighting some of the biggest and most popular investments in uranium</span></em></p> </div></div></div><div class="article-image"><img alt="2olh_wcu2" src="https://www.home.saxo/-/media/content-hub/images/2024/february/2olh_wcu2.png"/></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>Choppy price action in crude oil continues</span><strong><span>&nbsp; </span></strong></h3> <p><span>The major crude oil futures gave back most of their recent strong gains amid talks of a Gaza ceasefire reducing the geopolitical temperature. The fall was further strengthened by selling from wrong-footed traders who bought the recent technical break above $75.50 in WTI and $80.50 in Brent, only to be forced to adjust once prices broke back below. Overall, in the past few months, and since Houthi rebels began attacking ships in the Red Sea, traders have been dealing with a lot of &lsquo;noise&rsquo; in the market resulting in very choppy trading conditions as prices continue to ebb and flow with the news from the Middle East.</span></p> <p><span>Meanwhile, diesel prices in London and New York also traded lower after rallying strongly last month amid logistical challenges in the Red Sea where Houthi attacks have forced the redirection of shipments to Europe, forcing them onto longer voyage times, and hence higher freight costs. In addition, the mid-January US cold &lsquo;bomb&rsquo; drove a demand spike while recent drone attacks on Russian energy facilities have also increased supply concerns. Overall, the Ny Harbor ULSD and London Gas Oil futures contracts both maintain a year-to-date gain around 10% while WTI and Brent trade higher by less than 4%.</span></p> <p><span>We maintain the view that, unless a serious and very unlikely supply disruption occurs in the Middle East, both WTI and Brent will likely remain range bound around $75 in WTI and $80 in Brent </span><span>with no single trigger being strong enough to change the dynamics of a market that has divided its focus between growth worries, especially in China, the world&rsquo;s top importer, as well as rising non-OPEC+ production, OPEC+ cuts &ndash; now expected to be extended beyond the first quarter &ndash; and geopolitical risks. On top of this, we may see risk appetite ebb and flow in line with changes in the expected pace of US rate cuts. In the short-term, WTI will be facing strong resistance ahead of $80 and Brent ahead of $85. </span></p> <h3 class="article-heading--3"><span></span><span data-contrast="auto"> <br /> </span></h3></div></div><div class="article-image"><img alt="2olh_wcu3" src="https://www.home.saxo/-/media/content-hub/images/2024/february/2olh_wcu3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>Gold remains stuck on rate cut delay</span></h3> <p><span>The precious metals sector started February on a firm footing after spending most of January consolidating the strong gains seen during Q4 last year when gold rose 11.4% and silver 7.2%. The small losses seen in both metals last month was mostly driven by a stronger dollar and the market taking a raincheck on the timing, pace, and depth of incoming rate cuts. This past week, however, gold has risen towards key resistance around $2067, supported by a drop in the dollar and after US regional bank concerns resurfaced amid losses in commercial real estate helping drive US Treasury yields sharply lower. </span></p> <p><span>The latest Federal Reserve meeting described an uncertain path toward rate cuts in 2024 after Fed Chair Powell emphasized the need for more evidence that inflation is heading toward its 2% year-over-year target &ndash; a level that has already been reached using shorter time horizons &ndash; while also taking the strong labor market into consideration. However, a weaker than expected weekly jobless claims helped reignite expectations for a March rate cut, before deflating completely following a very strong January US job report which showed strength in both job creation and wages. US 10-year US Treasury yields paired back an earlier slump but stayed lower on the week around 4% while the dollar was heading for an unchanged week. </span></p> <p><span>According to the World Gold Council (WGC), total gold demand hit a record of 4,899 tons in 2023, supported by strong demand in the over-the-counter market, as well as from sustained central-bank buying &ndash; the People&rsquo;s Bank of China has been a continually active buyer, accounting for close to one-quarter of all central bank purchases. The WGC expects gold demand to expand again in 2024 as the US Federal Reserve moves toward cutting interest rates, potentially lifting demand from ETF investors who have been net sellers since 2022. </span></p> <p><span>While we maintain our bullish outlook for gold and silver, seeing them reach $2300 and $28 respectively this year, both precious metals are likely to remain stuck in the short-term until we get a better understanding about the timing, pace and depth of future US and EU rate cuts. Until the first cut is delivered, the market may at times run ahead of itself, in the process building up rate cut expectations to levels that leave prices vulnerable to a correction. With that in mind, the short-term direction of gold and silver will continue to be dictated by incoming economic data and their impact on the dollar, yields and not least rate cut expectations. </span></p> <h3 class="article-heading--3"><span> <br /> </span></h3></div></div><div class="article-image"><img alt="2olh_wcu4" src="https://www.home.saxo/-/media/content-hub/images/2024/february/2olh_wcu4.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <strong>Commodities articles:</strong> <p><span><br /> 25 Jan 2024:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/grains-up-on-short-covering-softs-supported-by-tight-supply-25012024">Grains up on short covering; softs supported by tight supply</a><br /> 24 Jan 2024:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-24012024">&nbsp;Disruption risks drive specs into Brent; distorted EIA report up next</a><br /> 23 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024"><strong><span>Silver and copper in focus after recent declines</span></strong></a></span><span><br /> 19 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a></span><span><br /> 17 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a></span><span><br /> 16 Jan 2024:</span><span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a></span><span><br /> 12 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a></span><span><br /> 9 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a><span><br /> 5 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> 21 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a><span><br /> 19 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a><span><br /> 14 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a><span><br /> 13 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a><span><br /> 12 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a><span><br /> 1 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a><span><br /> 30 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a><span><br /> 23 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a><span><br /> 22 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a><span>?<br /> 17 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a><span><br /> </span></p> <p><strong><span>Previous "Commitment of Traders" articles</span></strong><strong><span><br /> <br /> </span></strong><span>22 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><strong><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></strong></a><span><br /> 15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><strong><span><br /> </span></strong><span>18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a><span><br /> 20 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023"><strong><span>COT: Crude selling slows, grains in demand</span></strong></a><span><br /> 14 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023"><strong><span>COT: Crude long slumps; agriculture sector in demand</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Gas Oil</span> <span>Crude Oil</span> <span>Heating Oil</span> <span>Oil and Gas</span> <span>Oil</span> <span>Copper</span> <span>Agriculture</span> <span>China</span> <span>Highlighted articles</span> <span>Wheat</span> <span>Iron Ore</span> <span>Natural Gas</span></div>Fri, 02 Feb 2024 14:00:00 Z2024-03-27T10:51:39Z{20088C46-0ACB-4FEC-95CF-07D9BC635CEA}https://www.home.saxo/content/articles/commodities/commodities-january-performance-and-etf-flows-01022024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal ReserveMiningFocus InflationCommodities: January performance and ETF flows <div class="article-excerpt">The Bloomberg Commodity Index Total Return index managed a small positive return last month, the first in four months, with gains in energy and softs offsetting losses in grains and metals, both precious and industrial.</div><div class="article-rte"><div class="rte--output"><div> <p paraid="1538716343" paraeid="{63ed2ba0-f761-4e93-a4e2-58ba9fa7d7fa}{92}"><span data-contrast="auto">The Bloomberg Commodity Index Total Return index which tracks the performance of 24 major commodity futures spread between energy, metals and agricultural, managed a small positive return last month, the first in four months, with gains in energy and softs offsetting losses in grains as well as metals, both precious and industrial. Excluding natural gas, which slumped by close to 10% last month, the BCOM index returned 1.3%. On an individual level, major gains were seen in sugar, cocoa and diesel. The two soft commodities being supported by tight supply amid expectations for a drop in Indian and Brazilian sugar production while recent data on port arrivals in top grower Ivory Coast has trailed last year&rsquo;s figures amid dry weather and crop disease.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1851147677" paraeid="{63ed2ba0-f761-4e93-a4e2-58ba9fa7d7fa}{144}"><span data-contrast="auto">Diesel prices in London and New York rallied strongly amid logistical challenges in the Red Sea where Houthi attacks have forced the redirection of shipments to Europe, forcing them onto longer voyage times, and hence higher freight costs. In addition, the mid-January US cold &lsquo;bomb&rsquo; drove a demand spike while recent drone attacks on Russian energy facilities have also increased supply concerns.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="91224723" paraeid="{63ed2ba0-f761-4e93-a4e2-58ba9fa7d7fa}{174}"><span data-contrast="auto">Besides the slump in natural gas following a mid-month spike, weakness continued to be concentrated in the grains sector, with ample global supply ahead of the start of the northern hemisphere planting season being the main culprit for lower prices. The BCOM grains TR index closed last month at the lowest level since November 2021 after suffering a 4.7% loss, a development that has seen speculators accumulated the </span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024" target="_blank" rel="noopener noreferrer"><span data-contrast="none">biggest net short</span></a><span data-contrast="auto"> since May 2019.&nbsp;</span></p> </div> <p><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <div> <div> <h3><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="1olh_etf1" src="https://www.home.saxo/-/media/content-hub/images/2024/february/1olh_etf1.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <p paraid="325324008" paraeid="{5636701c-0124-4ba4-8b49-e5b253abe62d}{117}"><span data-contrast="auto">Industrial metals traded mixed with a second consecutive monthly loss being led by losses in nickel and aluminum, both currently seeing ample supply, while copper managed a small return amid short covering after the demand outlook brightened after the People&rsquo;s Bank of China, in their latest efforts to prop up the economy, surprised the market by announcing a bigger-than-expected cut in its reserve requirement ratio. Precious metals meanwhile traded lower but with gold showing underlying strength after recording a small loss compared to the adverse strength seen in the dollar.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="754515248" paraeid="{63ed2ba0-f761-4e93-a4e2-58ba9fa7d7fa}{236}"><span data-contrast="auto">A great deal of action was also seen in commodities that are not represented in the BCOM Index, most notably sport uranium U308 which continued its month-long rally amid a tightening supply outlook as&nbsp;major miners struggle to keep up with demand. Not least Kazakhstan&rsquo;s Kazatomprom,the world&rsquo;s top producer, who have lowered their 2024 production guidance by 9.3 million pounds or 14.2%, siting limited access to sulphuric acid. Other non-BCOM members such as EU TTF gas and platinum also suffered declines, with the latter seeing thediscount to gold hitting a record high above $1100 per ounce.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="2086845793" paraeid="{3f35d55e-3109-4bdf-87d7-6fb04bcf5a6f}{25}"><span data-contrast="auto"><strong>How did </strong><strong><span>ETF </span><span>investors respond to</span><span> these developments?</span></strong></span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="496001845" paraeid="{3f35d55e-3109-4bdf-87d7-6fb04bcf5a6f}{39}"><span data-contrast="auto">The table below show some of the world&rsquo;s largest and most actively traded commodity ETF&rsquo;s, their recent performance and not least recent investor flows. There are many ETFs tracking commodities so the list is by no means exhausted and should primarily be used for information and inspiration.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1195023751" paraeid="{3f35d55e-3109-4bdf-87d7-6fb04bcf5a6f}{53}"><span data-contrast="auto">The first section are UCITS-compliant ETFs and are based on an EU directive that provides a regulatory framework for funds that are managed and based in the EU. A UCITS fund can be marketed to and traded by private investors because it adheres to common risk and fund management standards, designed to shield investors from unsuitable investments.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="904974099" paraeid="{3f35d55e-3109-4bdf-87d7-6fb04bcf5a6f}{67}"><span data-contrast="auto">The second part of the table shows mostly US listed, and therefore non-UCITS compliant ETFs. It&rsquo;s among this group we find some of the world&rsquo;s biggest ETFs in terms of market cap, led by the GLD and IAU, two ETFs that tracks the performance of gold. It is also worth noting that due to changed taxation rules by the US Internal Revenue Service, </span><a href="https://www.help.saxo/hc/en-us/articles/7876414754205-Important-changes-on-US-Publicly-Traded-Partnership-PTP-Securities" target="_blank" rel="noopener noreferrer"><span data-contrast="none">Saxo</span></a><span data-contrast="auto"> no longer offer access to cash trading in PTP securities. We chose to show the PTP registered ETFs given the signal value they can provide, but also the fact that traders understanding the added risks of holding leveraged positions can still trade these as CFD&rsquo;s.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div></div></div><div class="article-image"><img alt="1olh_etf2" src="https://www.home.saxo/-/media/content-hub/images/2024/february/1olh_etf2.png"/></div><div class="article-additional-rte"><div class="rte--output"><span data-contrast="auto"><a href="https://www.saxotrader.com/sim/instant-demo/InstantDemo-EN-GL/page/product/FxSpot/8177?activeTab=overview&amp;cmpid=copy_link_platform_sharing"></a></span> <div> <div> <p paraid="1048649686" paraeid="{3f35d55e-3109-4bdf-87d7-6fb04bcf5a6f}{95}"><span data-contrast="auto">Looking at recent flows, January was generally a month where investors were net sellers of commodity tracking ETFs with the biggest reductions seen in those tracking crude oil, natural gas, and not least gold. However, t</span><span data-contrast="auto">he limited (negative) price impact of this gold selling highlights an underlying physical demand which is not visible in the so-called &lsquo;paper&rsquo; market. Instead, it is driven by continued strong demand for physical gold from central banks and China&rsquo;s middle class trying to preserve their dwindling fortunes caused by the property market crisis and one of the world&rsquo;s worst performing stock markets as well as a weakening yuan.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1547448547" paraeid="{3f35d55e-3109-4bdf-87d7-6fb04bcf5a6f}{139}"><span data-contrast="auto">At the top of the list, besides silver and copper, we see continued demand for broad-based exposure to commodities. Despite a prolonged period of sideways trading action, the long-term &lsquo;electrification of the world&rsquo; investment case for copper continues to attract demand from investors that a not time sensitive. It is also worth noting that demand from investors looking for a broad commodity exposure continue to rise, albeit at a slow pace, perhaps a reflection of a market where investors see upside potentials driven by tight supply of key commodities and incoming US rate cuts lowering the cost of money, thereby supporting a period of restocking by industries.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="273218723" paraeid="{3f35d55e-3109-4bdf-87d7-6fb04bcf5a6f}{183}"><span data-contrast="auto">An example of a BCOM tracking ETF, is the $2.2 billion market cap Invesco Bloomberg Commodity UCITS ETF. As per the chart below, the ETF surged 132% from the Covid-19 low in March 2020 until June 2022 before giving back around half those gains. During the past year, the index has traded mostly sideways within a narrowing range as the commodity market absorbed the negative impact of rising interest rates across the world as well as a slowing China and growth concerns elsewhere. The ETF is currently being supported around 21.38 with the prospect for an upside break requiring the ETF to rally by at least 4% from the current level around 22. </span><span data-ccp-props="{'134233117':false,'134233118':false,'201341983':0,'335551550':1,'335551620':1,'335559685':0,'335559737':0,'335559738':0,'335559739':160,'335559740':276}"></span></p> <h3 paraid="1033937941" paraeid="{40b2c94f-ca78-4b98-88a6-b55cc697fffa}{234}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <div> <p paraid="1425391661" paraeid="{7ae875e5-8831-4f3d-9c4d-e0eec23f9053}{112}"><span data-ccp-props="{'134233117':false,'134233118':false,'335559738':0,'335559739':0}"></span></p> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></div></div><div class="article-image"><img alt="1olh_etf3" src="https://www.home.saxo/-/media/content-hub/images/2024/february/1olh_etf3.png"/></div><div class="rte--output">Note: The above example is purely meant to inform and should not be taken as a recommendation to trade. Chart source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>30 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/gold-and-silver-look-to-fomc-for-direction-30012024">Gold and silver looks to FOMC for direction</a><br /> 26 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---26-jan-2024-26012024">Commodity weekly: Back in black supported by China stimulus</a><br /> 25 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/grains-up-on-short-covering-softs-supported-by-tight-supply-25012024"><strong><span>Grains up on short covering; softs supported by tight supply</span></strong></a><span><br /> 24 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-24012024"><strong><span>&nbsp;Disruption risks drive specs into Brent; distorted EIA report up next</span></strong></a><span><br /> 23 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024"><strong><span>Silver and copper in focus after recent declines</span></strong></a><span><br /> 19 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a><span><br /> 17 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a><span><br /> 16 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a><span><br /> 12 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a><span><br /> 9 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a><span><br /> 5 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> 21 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a><span><br /> 19 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a><span><br /> 14 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a><span><br /> 13 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a><span><br /> 12 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a><span><br /> 1 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a><span><br /> 30 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a><span><br /> 23 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a><span><br /> 22 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a><span>?<br /> 17 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a><span><br /> <br /> </span></p> <p><strong><span>Previous "Commitment of Traders" articles</span></strong><strong><span><br /> <br /> </span></strong><span>29 Jan 2024:<a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024"> COT: Squeeze risks after funds sold into rising commodity markets</a><br /> 22 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><strong><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></strong></a><span><br /> 15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><strong><span><br /> </span></strong><span>18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a><span><br /> 20 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023"><strong><span>COT: Crude selling slows, grains in demand</span></strong></a><span><br /> 14 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023"><strong><span>COT: Crude long slumps; agriculture sector in demand</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Mining</span> <span>Focus Inflation</span></div>Thu, 01 Feb 2024 11:30:00 Z2024-03-27T10:51:39Z{481D6C70-CC87-4DD1-90EE-803F4BE00867}https://www.home.saxo/content/articles/commodities/gold-and-silver-look-to-fomc-for-direction-30012024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal ReserveMiningFocus InflationGold and silver look to FOMC for direction<div class="article-excerpt">While gold has been drifting lower only to bounce after finding strong support ahead of $2000, silver has - almost as per usual - experienced a roller-coaster-month, at one point slumping to a two-month low before recovering strongly, supported by China stimulus-led rally in industrial metals.</div><div class="article-rte"><div class="rte--output"><div> <p paraid="532294874" paraeid="{4ed7e762-79d7-496b-b59a-e4a90bff7f30}{123}"><span data-contrast="auto">The precious metals sector has spent most of January consolidating following strong gains during Q4 last year when gold rose 11.4% and silver 7.2% as the US rate focus finally turned away from more hikes to cuts. The small losses seen in both metals so far this month have mostly been driven by a stronger dollar, up around 2% against a broad basket of major currencies, and the market taking a raincheck on the timing, pace and depth of incoming rate cuts. Note, the market is currently pricing in a 50% chance of a rate cut at the March 20 meeting while expectations for the entire year have moderated from six to five 25 basis point rate cuts.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1509640977" paraeid="{4ed7e762-79d7-496b-b59a-e4a90bff7f30}{177}"><span data-contrast="auto">While gold has been drifting lower only to bounce after finding strong support ahead of $2000, silver has - almost as per usual &ndash; experienced a roller-coaster-month, at one point slumping to a two-month low before recovering strongly, supported by a China stimulus-led rally in industrial metals. The result being a very volatile relationship between the two metals which at one point saw the gold-silver ratio surge to a September 2022 high above 92 ounces of silver to one ounce of gold, before dropping back to the current 88 ratio.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1039481457" paraeid="{4ed7e762-79d7-496b-b59a-e4a90bff7f30}{207}"><span data-contrast="auto">The fact gold has &lsquo;only&rsquo; lost around 1% despite the stronger dollar and a pickup in bond yields and reduced rate cut expectations is likely to have been driven by geopolitical concerns related to tensions in the Middle East, the worst since at least the 1970&rsquo;s according to US Secretary of State Blinken, and not least continued strong demand for physical gold from central banks and China&rsquo;s middle class attempting to preserve their dwindling fortunes caused by the property market crisis and one of the world&rsquo;s worst performing stock markets as well as a weakening yuan.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1023805535" paraeid="{4ed7e762-79d7-496b-b59a-e4a90bff7f30}{247}"><span data-contrast="auto">According to data from China&rsquo;s General Administration of Customs, imports of gold for non-monetary use rose to 1447 tons last year, breaking the previous record of 1427 tons in 2018. Most Chinese individuals are unable to buy US dollars or US dollar-denominated products to hedge against yuan depreciation, meaning buying gold as the most accessible means to safeguard the value of their assets, a demand which at some point last September saw spot gold prices on the Shanghai Gold Exchange trade around 120 dollars per ounce above the London spot price. In addition, the People&rsquo;s Bank of China (PBOC) was a very active buyer last year, accounting for close to one-quarter of all central bank purchases, after lifting their reserves by 225 tons to 2235 tons by year end (Source: </span><a href="https://www.gold.org/goldhub/research/chinas-gold-market-2023-demand-improved-and-premiums-rose?utm_source=Twitter&amp;utm_medium=Social&amp;utm_campaign=china-2023" target="_blank" rel="noopener noreferrer"><span data-contrast="none">World Gold Council</span></a><span data-contrast="auto">).</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <p><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <div> <div> <h3><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="30olh_xau0" src="https://www.home.saxo/-/media/content-hub/images/2024/january/30olh_xau0.png"/></div><div class="article-additional-rte"><div class="rte--output"><span data-contrast="auto"><a href="https://www.saxotrader.com/sim/instant-demo/InstantDemo-EN-GL/page/product/FxSpot/8177?activeTab=overview&amp;cmpid=copy_link_platform_sharing"></a></span> <div> <div> <p paraid="1972492649" paraeid="{490866e3-b12c-4122-a775-dfad76500e96}{31}"><span data-contrast="auto">Gold and silver are both likely to remain stuck until we get a better understanding about the timing, pace and depth of future US and EU rate cuts. Until the first cut is delivered, the market may at times run ahead of itself, in the process building up rate cut expectations to levels that leave prices vulnerable to a correction. With that in mind, the short-term direction of gold and silver will continue to be dictated by incoming economic data and their impact on the dollar, yields and not least rate cut expectations. With the U.S. growth outlook improving, the FOMC is in no hurry, and with that in mind, the current number of projected rate cuts cannot go any higher until the cat is out of the bag (cuts begin) or economic data suddenly takes a turn for the worse.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="474991044" paraeid="{490866e3-b12c-4122-a775-dfad76500e96}{73}"><span data-contrast="auto">Investors in ETFs and hedge funds in the futures market have been net sellers so far this month with total holdings in ETFs down 47 tons this month and 283 tons in the last twelve months. Managed money traders such as hedge funds and CTA&rsquo;s meanwhile held a 76.6k lots net long on January 23, following a three-week reduction of 61k lots (190 tons). The limited (negative) price impact of this selling highlights an underlying physical demand which is not visible in the so-called &lsquo;paper&rsquo; market.&nbsp;<br /> <br /> <span data-contrast="auto">Silver, in a relatively steep downtrend this past month, tumbled below $22 last week, only to see a strong recovery which by now has taken it back above $23 ahead of Fibo resistance at $23.45. For now, the main directional input is likely to be supplied by movements in gold and copper which following last week&rsquo;s China stimulus-led bounce has run out of steam with resistance at $3.90 in High Grade and $8600 on LME currently preventing more silver-supportive gains.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <h3 paraid="1033937941" paraeid="{40b2c94f-ca78-4b98-88a6-b55cc697fffa}{234}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <div> <p paraid="1425391661" paraeid="{7ae875e5-8831-4f3d-9c4d-e0eec23f9053}{112}"><span data-ccp-props="{'134233117':false,'134233118':false,'335559738':0,'335559739':0}"></span></p> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></div></div><div class="article-image"><img alt="30olh_xau3" src="https://www.home.saxo/-/media/content-hub/images/2024/january/30olh_xau3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><div> <p paraid="1989187661" paraeid="{a61952c4-dd68-464d-a35d-bd8ec583e78c}{239}"><span data-contrast="auto"><span data-contrast="auto">Spot gold, in a small downtrend this month, has managed to bounce after finding strong support ahead of $2000 with the break above trendline resistance, last at $2028, and confirmed by a break above $2040 raising the potential of further gains.&nbsp;The latest move higher being supported by lower Treasury yields after the US Treasury unexpectedly reduced its estimate for federal borrowing this current quarter. In addition, traders will also be focusing on Wednesday&rsquo;s Federal Reserve meeting as it may provide fresh clues on when US monetary easing will start. Recent US data has been inconclusive, while the Fed&rsquo;s preferred gauge of underlying inflation cooled to a near three-year low, consumer spending topped estimates.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></span></p> </div></div></div><div class="article-image"><img alt="30olh_xau2" src="https://www.home.saxo/-/media/content-hub/images/2024/january/30olh_xau2.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>26 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---26-jan-2024-26012024">Commodity weekly: Back in black supported by China stimulus</a><br /> 25 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/grains-up-on-short-covering-softs-supported-by-tight-supply-25012024"><strong><span>Grains up on short covering; softs supported by tight supply</span></strong></a><span><br /> 24 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-24012024"><strong><span>&nbsp;Disruption risks drive specs into Brent; distorted EIA report up next</span></strong></a><span><br /> 23 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024"><strong><span>Silver and copper in focus after recent declines</span></strong></a><span><br /> 19 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a><span><br /> 17 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a><span><br /> 16 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a><span><br /> 12 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a><span><br /> 9 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a><span><br /> 5 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> 21 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a><span><br /> 19 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a><span><br /> 14 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a><span><br /> 13 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a><span><br /> 12 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a><span><br /> 1 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a><span><br /> 30 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a><span><br /> 23 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a><span><br /> 22 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a><span>?<br /> 17 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a><span><br /> <br /> </span></p> <p><strong><span>Previous "Commitment of Traders" articles</span></strong><strong><span><br /> <br /> </span></strong><span>29 Jan 2024:<a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024"> COT: Squeeze risks after funds sold into rising commodity markets</a><br /> 22 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><strong><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></strong></a><span><br /> 15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><strong><span><br /> </span></strong><span>18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a><span><br /> 20 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023"><strong><span>COT: Crude selling slows, grains in demand</span></strong></a><span><br /> 14 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023"><strong><span>COT: Crude long slumps; agriculture sector in demand</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Mining</span> <span>Focus Inflation</span></div>Tue, 30 Jan 2024 11:30:00 Z2024-03-27T10:51:40Z{9ED6A4C5-0AD3-42ED-8D8F-78F9633E4D5D}https://www.home.saxo/content/articles/commodities/coffee-29012024Ole Hansenproduct-commoditiescommodity-coffeeHighlighted articlesBrewing trends: unpacking the reasons behind soaring coffee prices<div class="article-excerpt">Coffee is hot right now - not only in temperature but also in price movements. Learn why coffee prices are rising and how this affects both consumers and traders as we explore the intricate balance of supply, demand, and market dynamics. </div><div class="article-rte"><div class="rte--output"><div> <h2 class="article-heading--2">Understanding the increase in coffee prices</h2> <span data-ccp-props="{'201341983':0,'335559738':300,'335559739':300,'335559740':279}"></span></div> <div> <p paraid="641419269" paraeid="{9c56b673-3dc9-4b93-80b8-56aa81053aed}{95}"><span data-contrast="none">What&rsquo;s causing coffee futures prices to go up? A key reason for the change, particularly for the robusta bean mostly grown in Southeast Asia, is that Vietnam faced a tough drought last year. This didn't just affect coffee prices but also pushed up the price of sugar. Due to this, there was less coffee produced, but people still wanted their coffee. This mismatch between demand and supply is pushing prices higher &ndash; a common situation in markets.<br /> <br /> </span><span data-ccp-props="{'201341983':0,'335559738':300,'335559739':300,'335559740':279}"></span></p> </div> <div> <h2 class="article-heading--2"><span data-contrast="none">How rising coffee prices affect consumers and traders</span></h2> </div> <div> <p paraid="493425218" paraeid="{9c56b673-3dc9-4b93-80b8-56aa81053aed}{117}"><span data-contrast="none">As coffee prices go up, different people are affected in different ways. For those who enjoy a daily coffee, the good news is that the cost of coffee beans is only a small part of the price we pay for a cup. Therefore, consumers won&rsquo;t feel a direct impact from this when they visit their local coffee shop.<br /> <br /> </span><span data-ccp-props="{'201341983':0,'335559738':300,'335559739':300,'335559740':279}"></span></p> </div> <div> <p paraid="1266900108" paraeid="{9c56b673-3dc9-4b93-80b8-56aa81053aed}{128}"><span data-contrast="none">For traders, it's a big deal. The price of coffee beans has jumped by 60% over the last year, which has a big impact on the market and creates new opportunities for trading. Traders should be watching these price changes closely, as there is a lot of movement in the market, and therefore a lot more opportunities.</span><span data-ccp-props="{'201341983':0,'335559738':300,'335559739':300,'335559740':279}"></span></p> </div></div></div><div class="article-video"><iframe title="" src="//saxobank.23video.com/13846859.ihtml/player.html?source=embed&photo_id=93030442"></iframe></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Coffee</span> <span>Highlighted articles</span></div>Mon, 29 Jan 2024 14:00:00 Z2024-03-27T10:51:40Z{E924F70F-3985-46AD-9441-F1456DB91C68}https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-29012024Ole Hansenproduct-commoditiesCOT Commoditiescommodity-crude oilcommodity-natural gascommodity-goldcommodity-silvercommodity-coppercommodity-platinumcommodity-corncommodity-sugarcommodity-coffeecommodity-gasolinecommodity-palladiumcommodity-wheatcommodity-cocoacommodity-cottoncommodity-cattlesector-gics-1010product-forexCOT FXforex-eurusdforex-usdjpyforex-audusdforex-usdcadforex-usdchfforex-gbpusdforex-nzdusdsubject-is/fin.stpbondBonds Inspirationproduct-bondsproduct-forexEn hurtig tankeCOT: Squeeze risks after funds sold into rising commodity markets<div class="article-excerpt">Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to last Tuesday, January 23</div><div class="article-rte"><div class="rte--output"><em>Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities while in forex we use the broader measure called non-commercial.</em></div></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>What is the Commitments of Traders report?</span></h3> <br /> <p>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.</p> <p>Commodities: Producer/Merchant/Processor/User, Swap dealers,&nbsp;<span>Managed Money</span>&nbsp;and other<br /> Financials: Dealer/Intermediary; Asset Manager/Institutional;&nbsp;<span>Leveraged Funds</span>&nbsp;and other<br /> Forex: A broad breakdown between commercial and&nbsp;<span>non-commercial</span>&nbsp;(speculators)</p> <p>The main reasons why we focus primarily on the behavior of speculators, such as hedge funds and trend-following CTA's are:</p> <ul> <li>They are likely to have&nbsp;<span>tight stops</span>&nbsp;and&nbsp;<span>no underlying exposure</span>&nbsp;that is being hedged</li> <li>This makes them&nbsp;<span>most reactive to changes</span>&nbsp;in fundamental or technical price developments</li> <li>It provides views about&nbsp;<span>major trends</span>&nbsp;but also helps to decipher when a&nbsp;<span>reversal</span>&nbsp;is looming</li> </ul> <p>Do note that&nbsp;<span >this group tends to <strong>anticipate, accelerate, and amplify</strong> price changes that have been set in motion by <strong>fundamentals</strong>. Being followers of momentum, this strategy often sees this group of traders buy into strength and sell into weakness, meaning that they are often found holding the biggest long near the peak of a cycle or the biggest short position ahead of a through in the market.</span></p></div></div><div class="article-additional-rte"><div class="rte--output"><span></span> <div> <span></span> <span></span> <div> <span></span> <div> <div> <div> <div> <div> <div> <div> <span></span> <div> <div> <span data-contrast="none"></span><span></span> <div> <span data-contrast="none"></span> <div> <span data-contrast="none"></span> <div> <span></span> <span></span> <div> <span>This summary highlights futures positions and changes made by hedge funds across commodities</span><span> and </span><span>forex</span><span> </span><span>in the</span><span> </span><span>week to </span><span>last </span><span>Tuesday</span><span>, </span><span>January</span><span> </span><span>23. A week</span><span> </span><span>where risk appetite was supported by a succession of record highs </span><span>in the </span><span>two </span><span>leading US stock market indices</span><span> amid upbeat earnings reports</span><span> and investors cheering the </span><span>economy&rsquo;s </span><span>resilience</span><span> despite </span><span>the most aggressive policy-tightening in decades</span><span>. A mood that was not </span><span>hurt</span><span> by </span><span>a rise in US Treasury yields after Federal Reserve members warned that US rate cuts </span><span>should not be expected anytime soon. </span><span>Meanwhile, the commodity sector continued to see net selling from funds</span><span>, especially in metals and grains, </span><span>despite a </span><span>much-improved</span><span> tone which saw </span><span>broad</span> gains across the asset class.&nbsp;&nbsp;<br /> <br /> <h3 class="article-heading--3">Commodities:</h3> <span data-contrast="auto" >The Bloomberg Commodity index, which tracks a basket of 24 major futures markets split between energy (30.1%), metals (34.2%) and agriculture (35.7%), traded higher on the week with broad gains being partly offset by a 15% tumble in natural gas. However, despite the broad gains, the net long futures and options position held by hedge funds and CTA&rsquo;s was nevertheless reduced for a fourth consecutive week, reaching a fresh September 2019 low. In the process leaving several commodities, especially industrial metals and energy futures exposed to what followed last week, not least rising geopolitical tensions, China&rsquo;s surprise cut in its RRR as well as the US GDP surprise.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}" ></span> <p paraid="1685280879" paraeid="{a2cc2b4b-12a4-4a48-91d1-12d4c44872a2}{205}"><span data-contrast="auto">Selling was concentrated in metals and grains with short positions in copper, soybeans and corn reaching multi-year highs while demand was concentrated in WTI crude oil, gas oil, softs and livestock.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="1815481085" paraeid="{9dc17bdc-2b11-4bfd-b9b9-624ec6b0c42a}{183}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div> </div> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}" ></span></div> </div> <p paraid="1396398248" paraeid="{a9890f65-bd09-43ce-b941-e232248f0c46}{133}"><span data-contrast="auto"> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p><span> </span></p> <p><span> </span></p> </div> </div> </div> <div> <span data-ccp-props="{'201341983':0,'335559740':259}" ></span></div> </div> </div> <div> <p paraid="739880928" paraeid="{6472d595-91b7-4440-89e9-890d4acd9c8e}{166}"><span data-contrast="none"> </span></p> </div> <p><span> </span></p> </div> <div> <p paraid="1053527918" paraeid="{f64664da-5092-46b8-866f-464e46bdf07a}{149}"><span data-ccp-props="{}"></span></p> </div> </div> </div> </div></div></div><div class="article-image"><img alt="29olh_cot1" src="https://www.home.saxo/-/media/content-hub/images/2024/january/29olh_cot1.png"/></div><div class="rte--output">Four weeks of selling has seen the net long across 24 major futures contracts slump 72% to 115k contracts, a June 2019 low. Selling being led by grains (-270k) and metals (-154k) and only partly offset by demand for energy (+66k) and softs (+50k)</div><br/><div class="article-additional-rte"><div class="rte--output"><h3><span data-contrast="auto">Middle East risk premium continues to ebb and flow in crude and gold&nbsp;</span></h3> <p paraid="691667270" paraeid="{a2cc2b4b-12a4-4a48-91d1-12d4c44872a2}{231}"><span data-contrast="auto">Last week&rsquo;s technical driven rally in crude oil above recent resistance, in WTI at 75.50 and 80 in Brent, was extended on Friday and today in Asia before deflating following news about a Houthi attack on a tanker in the Red Sea and the drone strike that killed US army personnel in Jordan. Since early December when the Red Sea crisis threatened to spill over the wider region, the market has been trying to price in the risk of an actual but not yet realized disruption to supply, the result being a mostly range bound crude oil price seeing temporary spikes before deflating.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="875536814" paraeid="{1c113a98-c430-44f3-a11a-61eca33bd4e6}{14}"><span data-contrast="auto">The latest developments briefly sent Brent crude through the November high at 84.61 before running out of steam after Iran denied having anything to do with the weekend attack on a U.S. base in Jordan. It supports our belief that Iran has no intention of stoking a war that could set the Middle East alight and disrupt supply from the region. Key producers in the area and critical consumers of Middle East oil, especially in Asia, will not allow this situation to escalate to a point where supplies are being disrupted. Ahead of the US election, however, we may see the Biden administration tighten sanctions against Iran, but with plenty of spare capacity available from GCC members, the risk of a price spike is limited.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></div></div><div class="article-image"><img alt="29olh_cot2" src="https://www.home.saxo/-/media/content-hub/images/2024/january/29olh_cot2.png"/></div><div class="article-image"><img alt="29olh_cot3" src="https://www.home.saxo/-/media/content-hub/images/2024/january/29olh_cot3.png"/></div><div class="rte--output">Energy: Reversing recent behavior, WTI finally saw strong demand with the net-long jumping 48% to 134k, an 11-week high while Brent was reduced by 8% to 208k. The fuel contracts were mixed with a near doubling of the ICE Gasoil long standing out. Elsewhere, a 15% slump in natural gas saw the net flip back to a small short</div><br/><div class="article-image"><img alt="29olh_cot4" src="https://www.home.saxo/-/media/content-hub/images/2024/january/29olh_cot4.png"/></div><div class="rte--output">Metals: Broad selling across the sector continued for a second week led by a 24% reduction in the gold long to a three-month low, the platinum and not least silver net flipped back to a short following Monday’s slump. Ahead of the China stimulus surprise funds had increased their copper net short to 31k, a near four-year high.</div><br/><div class="article-image"><img alt="29olh_cot5" src="https://www.home.saxo/-/media/content-hub/images/2024/january/29olh_cot5.png"/></div><div class="rte--output">Grains: A sixth week of selling drove the net short across the six contracts tracked to a fresh May 2019 high at -524k. The soybean short reached a four-year high while the soymeal flipped to a net short following the most aggressive two-month selling period on record. A massive corn short extended further although the pace of selling showed signs of slowing. </div><br/><div class="article-image"><img alt="29olh_cot6" src="https://www.home.saxo/-/media/content-hub/images/2024/january/29olh_cot6.png"/></div><div class="rte--output">In softs, all four contracts saw net buying as tight supply continues to boost prices, in some cases to record highs. The sugar long almost doubled as traders scrambled to rebuild positions as the January rally extended beyond 15%, while funds flipped their cotton position back to a net long as prices continued to recover.</div><br/><div class="article-image"><img alt="29olh_cot7" src="https://www.home.saxo/-/media/content-hub/images/2024/january/29olh_cot7.png"/></div><div class="rte--output">In forex, speculators bought dollars for the second week, leading to a 41% reduction in the gross short position vs eight IMM futures and the DXY to $5.4 billion. Led by sellers of euros (15.8k), yen (14.1k) and AUD (6.3k), and only partly offset by demand for CAD (4.9k) and kiwi (1.1k). </div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>19 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024">Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</a><br /> 17 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a><span><br /> 16 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a><span><br /> 12 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a><span><br /> 9 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a><span><br /> 5 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> 21 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a><span><br /> 19 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a><span><br /> 14 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a><span><br /> 13 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a><span><br /> 12 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a><span><br /> 1 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a><span><br /> 30 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a><span><br /> 23 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a><span><br /> 22 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a><span>?<br /> 17 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a><span><br /> 16 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-16-nov-2023---commodities-16112023"><strong><span>Podcast: Silver comeback, watch OPEC as crude oil slides lower</span></strong></a><span><br /> 16 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-weakness-adds-focus-to-upcoming-opec-meeting-16112023"><strong><span>Crude oil weakness adds focus to upcoming OPEC meeting</span></strong></a><span><br /> 15 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/soft-cpi-lifts-gold-and-beaten-down-silver-and-platinum-15112023"><strong><span>Soft CPI lifts gold and beaten down silver and platinum</span></strong></a><span><br /> 12 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/copper-update---21-november-2023-21112023"><strong><span>Copper supported by green transformation demand and peak rate speculation</span></strong></a><span>&nbsp;<br /> 10 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---10-november-2023-10112023"><strong><span>Commodity weekly: Crude oil risks overshooting the downside</span></strong></a></p> <p><strong><span>Previous "Commitment of Traders" articles</span></strong><strong><span><br /> <br /> </span></strong><span>15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><strong><span><br /> </span></strong><span>18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a><span><br /> 20 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023"><strong><span>COT: Crude selling slows, grains in demand</span></strong></a><span><br /> 14 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023"><strong><span>COT: Crude long slumps; agriculture sector in demand</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>COT Commodities</span> <span>Crude Oil</span> <span>Natural Gas</span> <span>Gold</span> <span>Silver</span> <span>Copper</span> <span>Platinum</span> <span>Corn</span> <span>Sugar</span> <span>Coffee</span> <span>Gasoline</span> <span>Palladium</span> <span>Wheat</span> <span>Cocoa</span> <span>Cotton</span> <span>Cattle</span> <span>Energy (Sector)</span> <span>Forex</span> <span>COT FX</span> <span>EURUSD</span> <span>USDJPY</span> <span>AUDUSD</span> <span>USDCAD</span> <span>USDCHF</span> <span>GBPUSD</span> <span>NZDUSD</span> <span>Government Bonds</span> <span>Bonds nspiration</span> <a href="https://www.home.saxo/insights/news-and-research/bonds">Bonds</a> <a href="https://www.home.saxo/insights/news-and-research/forex">Forex</a> <span>En hurtig tanke</span></div>Mon, 29 Jan 2024 11:00:00 Z2024-03-27T10:51:44Z{8E0EF8A8-6E15-438B-A5C1-7D6E3CFE9BE8}https://www.home.saxo/content/articles/commodities/commodity-weekly---26-jan-2024-26012024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal Reservecommodity-gas oilcommodity-crude oilcommodity-heating oilsector-Oil and GasOilcommodity-copperAgricultureplace-lc/cnHighlighted articlescommodity-wheatIron Orecommodity-natural gasCommodity weekly: Back in black supported by China stimulus<div class="article-excerpt">The Bloomberg Commodity Index head for its first weekly gain in six weeks, with the index now up on the month, with gains this past week being led by energy and industrial metals in response to China stimulus and robust US growth in a lower inflation environment</div><div class="article-rte"><div class="rte--output"><p><span>A commodities sector under mild selling pressure for a while finally found a bid this past week, driving a broad rally across most sectors, not least industrial metals and energy. The demand outlook brightened after the People&rsquo;s Bank of China, in their latest efforts to prop up the economy, surprised the market by announcing a bigger-than-expected cut in its reserve requirement ratio. The move, seen as an attempt to prop up confidence in an economy suffering from disinflation, a property market slump and a recent $6 trillion stock market rout, helped trigger a stock market bounce while supporting gains in iron ore and China-centric industrial metals.</span></p> <p><span>In addition, US Q4 GDP surprised to the upside, and with the inflation metrics cooling, the report did not hurt the markets&rsquo; belief in US rate cuts, with a 50/50 chance of the first being delivered at the March 20 FOMC meeting. Market sentiment has also improved with a renewed fall in US Treasury yields and a US earnings season which so far has surprised to the upside. All in all, these developments have seen the Bloomberg Commodity Index head for its first weekly gain in six weeks, with the index now up on the month, with gains this past week being led by crude oil and fuel products. At the bottom, we find EU and US natural gas, both falling amid the prospect for milder weather and with just a few weeks of winter left, the risk of a cold-weather demand spike easing. </span></p> <p><span> </span></p> <p><span> </span></p></div></div><div class="article-image"><img alt="26olh_wcu0" src="https://www.home.saxo/-/media/content-hub/images/2024/january/26olh_wcu0.png"/></div><div class="article-additional-rte"><div class="rte--output"><p><span> </span></p> <div> <p><span>The energy sector, heading for its best week since October, was supported by rising geopolitical risks despite Chinese authorities </span><span><a href="https://www.reuters.com/world/middle-east/china-presses-iran-rein-houthi-attacks-red-sea-sources-say-2024-01-26/"><span>asking Iran to curb Houthi </span></a></span><span>&nbsp;attacks in the Red Sea, saying that if China&rsquo;s interests are harmed it could impact commercial relations with Iran. In addition, support was also provided by a big weekly drop in US stockpiles, albeit somewhat distorted by the recent cold &lsquo;bomb&rsquo; which slowed production, imports and refinery activity, and not least news that China, the world&rsquo;s biggest importer of crude oil, had stepped up efforts to support the economy. These developments saw Brent and WTI top out of their recent ranges with technical buying adding some additional upside momentum. </span></p> <p><span>Industrial metals, stuck in the mud for months, made a so far unsuccessful attempt to break higher. The rally was led by the beaten down metals of nickel and aluminum, the latter finding some additional support from a possible widening of an EU import ban on Russian aluminum products from 12% to 100% in the upcoming 13<sup>th</sup> sanctions package against Russia, planned to be approved by February 24. Copper prices, meanwhile, rose with the initial rally being driven by wrong footed short sellers who recently flipped their HG copper futures position from a net long to the biggest net short since 2022.&nbsp; </span></p> We maintain a positive outlook for copper given the prospect of an increasingly tight market towards the second half of the year. However, given current worries about China, despite the latest dose of stimulus, and ongoing speculation about the timing, pace and depth of incoming US rate cuts, the direction for now will likely be decided by short-term trading strategies, like the short covering rally seen this past week.&nbsp;<br /> <br /> <h3 class="article-heading--3">Short covering a key driver behind the latest bounce</h3> <p><span>Adjusting speculative positions has indeed been a major source of support for commodities recently, with beaten down markets and sectors bouncing &ndash; at this stage primarily due to forced short covering from hedge funds and CTAs which started the year with the weakest belief in higher commodity prices since 2015. Taking a look at the weekly <a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024">Commitment of Traders report</a>&nbsp;which covers positions and changes made by money managers across major US and EU futures markets, we find that net short positions in the week to January 16 were held in nearly half of the contracts that we track. </span></p> </div></div></div><div class="article-image"><img alt="26olh_wcu2" src="https://www.home.saxo/-/media/content-hub/images/2024/january/26olh_wcu2.png"/></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3">Grain and soy fundamentals not yet pointing to a sustained reovery</h3> <br /> Not least the beaten down grains sector which, this past week, made an attempt to recover from a four-year low, in the process forcing the hand of hedge funds and other large speculators, who have been net sellers since November of the six major grain and soy futures traded in Chicago. The latest COT report showed an increase in the net short to 496,000 contracts, the second biggest bet on lower prices on record, and only exceeded by a 707,000-contract short in May 2019. A short position which back then subsequently helped trigger a four-week bounce back that drove the Bloomberg Grains index higher by 20%.<br /> <br /> We estimate that the current fundamentals do not warrant a rally on the scale mentioned, simply because the timing is off with no major unknowns this time of year to trigger such a move. The current market focus is on South American weather conditions and the potential crop size while in the US with spring planting still a few months away the focus is on exports sales which has been slowing, potentially increasing the carryout at the end of the current crop year. While a low may have already been established, the prospect for a renewed rally beyond the current short covering phase seems limited but given how far the different crop futures have fallen, a short covering bounce when it occurs could still be significant.<br /> <br /> <h3 class="article-heading--3">Crude oil breaks out of the recent trading range</h3> <br /> <span >WTI crude oil, the best performing commodity this past week, received a boost from the technical break above $75.50, and $80.50 in Brent - forcing investors to rethink a strategy which for several weeks had seen them switch their long exposure to Brent away from WTI in the belief that production growth will continue to pressure prices in the United States while conflict in the Middle East will provide some support for prices in Europe and Asia. While the general rally in crude oil from the early December lows saw the combined net long in Brent and WTI jump by 85% to 317k contracts, the split between the two has decisively moved in favor of Brent which in the latest reporting week accounted for 72% of the total net long.</span>Brent has also been supported by a relatively faster rise in the backwardation, the spread between front end and deferred futures contracts. An example of this is the three-month spread, currently between the March and the June futures contracts which in Brent has widened to $1.22 per barrel, giving long-only investors a three-month annualized carry of 6% while the similar spread in WTI at 0.65 per barrel only provides a 3.4% carry, a difference that matters to investors, making Brent more attractive from an investment perspective.<br /> <br /> <p><span>We maintain the view that, unless a serious supply disruption occurs in the Middle East, both WTI and Brent will likely remain range bound around $75 in WTI and $80 in Brent </span><span>with no single trigger being strong enough to change the dynamics of a market that has divided its focus between growth worries, not least in China and the USA, as well as rising non-OPEC+ production on one hand and OPEC+ cuts and geopolitical risks on the other. On top of this, we may see risk appetite ebb and flow in line with changes in the expected pace of US rate cuts. In the short-term, WTI will be facing some resistance at $77.65, the 200-day moving average with the upside in our opinion being limited beyond $80 per barrel. </span></p> <h3 class="article-heading--3"><span></span><span data-contrast="auto"> <br /> </span></h3></div></div><div class="article-image"><img alt="26olh_wcu3" src="https://www.home.saxo/-/media/content-hub/images/2024/january/26olh_wcu3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3">Silver&rsquo;s tumble attracts fresh demand; gold looks to economic data for direction</h3> <br /> <span >The precious metals sector struggled to keep up with the gains seen across the other sectors, and while gold had a relatively quiet week ahead of Friday&rsquo;s important US PCE deflator report &ndash; the FOMC&rsquo;s favorite inflation indicator &ndash; silver experienced a roller-coaster week, hitting a two-month low on Monday before recovering strongly, supported by the China-stimulus-led rally in industrial metals.</span> <p><span><br /> Gold traded within the tightest range since December 2021, with firm support seen in the $2000-05 area, while the upside remains limited until we get a better understanding about the timing, pace and depth of future US and EU rate cuts. Until the first cut is delivered, the market may at times run ahead of itself, in the process building up rate cut expectations to levels that leave prices vulnerable to a correction. With that in mind, the short-term direction of gold and silver will continue to be dictated by incoming economic data and their impact the dollar, yields and not least rate cut expectations. </span></p> <p><span>Silver, in a relatively steep downtrend this past month, tumbled below $22 on Monday, only to see a strong recovery as the lower prices helped attract fresh buying. A weekly close near or above $23 will create an interesting technical setup with the hammer candlestick pattern potentially signaling a reversal, similar to those seen on three previous occasions. </span></p> <p><span> <br /> </span></p></div></div><div class="article-image"><img alt="26olh_wcu4" src="https://www.home.saxo/-/media/content-hub/images/2024/january/26olh_wcu4.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <strong>Commodities articles:</strong> <p><span><br /> 25 Jan 2024:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/grains-up-on-short-covering-softs-supported-by-tight-supply-25012024">Grains up on short covering; softs supported by tight supply</a><br /> 24 Jan 2024:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-24012024">&nbsp;Disruption risks drive specs into Brent; distorted EIA report up next</a><br /> 23 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024"><strong><span>Silver and copper in focus after recent declines</span></strong></a></span><span><br /> 19 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a></span><span><br /> 17 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a></span><span><br /> 16 Jan 2024:</span><span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a></span><span><br /> 12 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a></span><span><br /> 9 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a><span><br /> 5 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> 21 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a><span><br /> 19 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a><span><br /> 14 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a><span><br /> 13 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a><span><br /> 12 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a><span><br /> 1 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a><span><br /> 30 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a><span><br /> 23 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a><span><br /> 22 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a><span>?<br /> 17 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a><span><br /> </span></p> <p><strong><span>Previous "Commitment of Traders" articles</span></strong><strong><span><br /> <br /> </span></strong><span>22 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024"><strong><span>COT: Commodities short-selling on the rise amid China woes and Fed caution</span></strong></a><span><br /> 15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><strong><span><br /> </span></strong><span>18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a><span><br /> 20 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023"><strong><span>COT: Crude selling slows, grains in demand</span></strong></a><span><br /> 14 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023"><strong><span>COT: Crude long slumps; agriculture sector in demand</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Gas Oil</span> <span>Crude Oil</span> <span>Heating Oil</span> <span>Oil and Gas</span> <span>Oil</span> <span>Copper</span> <span>Agriculture</span> <span>China</span> <span>Highlighted articles</span> <span>Wheat</span> <span>Iron Ore</span> <span>Natural Gas</span></div>Fri, 26 Jan 2024 13:45:00 Z2024-03-27T10:51:40Z{C7E78DB3-5535-48BE-AA2A-001F7F8109DC}https://www.home.saxo/content/articles/commodities/grains-up-on-short-covering-softs-supported-by-tight-supply-25012024Ole Hansenproduct-commoditiesInflationFederal Reservecommodity-crude oilcommodity-gas oilcommodity-heating oilOilsector-Oil and Gasplace-lc/cnGrains up on short covering; softs supported by tight supply <div class="article-excerpt">The grains sector trades higher for a sixth day as the beaten-down sector tries to recover from a four-year low reached earlier this month. Also a look at the softs sector where cocoa and Robusta coffee continues to reach fresh highs</div><div class="article-rte"><div class="rte--output"><span></span> <div> <p paraid="301014797" paraeid="{5b3eecd2-6223-4b14-ad40-a81aedd99793}{127}"><span data-contrast="auto">The grains sector trades higher for a sixth day as the beaten-down sector tries to recover from a four-year low reached earlier this month. The trigger behind the latest attempt to bounce has been driven by continued turmoil in the key Red Sea trade route, tensions between Moscow and Kyiv adding to concerns about wheat supplies, and not least weather worries in South America.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="237990954" paraeid="{5b3eecd2-6223-4b14-ad40-a81aedd99793}{151}"><span data-contrast="auto">These developments have forced the hand of hedge funds and other large speculators, who have been net sellers since November of the six major grain and soy futures traded in Chicago. In the week to January, the&nbsp;weekly Commitment of Traders report showed an increase in the net short to 496,000 contracts, the second biggest bet on lower prices on record, and only exceeded by a 707,000-contract short in May 2019. A short position which back then led to a four-week 20% bounce in the Bloomberg Grains index.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="25olh_crop1" src="https://www.home.saxo/-/media/content-hub/images/2024/january/25olh_crop1.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <div> <p paraid="2114154620" paraeid="{34447e95-309f-4655-b7b4-e412c0da70cc}{187}"><span data-contrast="auto">Large m</span><span data-contrast="auto">oney managers such as hedge funds and CTA&rsquo;s have, since early December when the Red Sea crisis started, increasingly been diverging their crude oil exposure away from WTI towards Brent. According to weekly </span><span data-contrast="none"><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024">Commitment of Traders</a></span><span data-contrast="auto"> reports provided by the major futures exchanges in the US and Europe, the combined net long in WTI and Brent slumped to a 12-year low in early December at 171k contracts or 171 million barrels, with the split between Brent and WTI being 57% and 43%.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="59807798" paraeid="{34447e95-309f-4655-b7b4-e412c0da70cc}{235}"><span data-contrast="auto">However, the combination of the Red Sea crisis disrupting normal supply routes and rising US production have since then triggered a major divergence between the two. While the general rally in crude oil from the early December lows has seen the total net long jump by 85% to 317k contracts, the split between Brent and WTI has decisively moved in favor of Brent with 72% of the total net long being Brent. Investors appear to have concluded production growth will continue to pressure prices in the United States while the Middle East conflict will provide some support for prices in Europe and Asia.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div></div></div><div class="article-image"><img alt="25olh_crop3" src="https://www.home.saxo/-/media/content-hub/images/2024/january/25olh_crop3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><div> <p paraid="1577633054" paraeid="{89c955e9-cb90-4e01-9129-f9694000fd20}{33}"><span data-contrast="auto"><span data-contrast="auto">If we widen the agriculture focus to include the soft commodities such as cocoa, coffee and sugar we find that the sharp divergence in performance seen last year has continued into 2024. Last year cocoa and coffee were two of the best performing commodities while wheat and corn were found near the bottom. The result being a YoY return for the Bloomberg Softs index around 21% while the Grains index has lost around the same percentage.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div></div></div><div class="article-image"><img alt="25olh_crop2" src="https://www.home.saxo/-/media/content-hub/images/2024/january/25olh_crop2.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <h3><span data-contrast="auto">Tight supply risks boost soft commodities</span></h3> <p paraid="708113509" paraeid="{efb8c684-d3bb-4ffa-9bb6-d56d0880c8dd}{29}"><span data-contrast="auto">With the current focus on an economic downturn potentially hurting demand for growth-dependent commodities, we have recently been reminded that prices are not only dictated by demand but also the availability of supply. The Bloomberg Softs subindex reached a fresh nine-year high this past week, supported by adverse weather impacts on production, especially across the Southern Hemisphere where the impact of a returning </span><a href="https://www.climate.gov/news-features/blogs/october-2023-el-nino-update-big-cats#:~:text=Taken%20collectively%2C%20the%20ocean%20surface,oceans%20are%20warmer%20than%20average.#:~:text=Taken%20collectively%2C%20the%20ocean%20surface,oceans%20are%20warmer%20than%20average." target="_blank" rel="noopener noreferrer"><span data-contrast="none">El Ni&ntilde;o</span></a><span data-contrast="auto"> is being felt, in the process driving down available stocks. The rally has been led by cocoa which has soared the most in six years to reach a fresh 46-year high, as resilient demand put pressure on tight supply due to declining production in West Africa, especially top grower Ivory Coast which has seen deliveries of cocoa to ports being down around 37% compared with this time last year.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="726004631" paraeid="{efb8c684-d3bb-4ffa-9bb6-d56d0880c8dd}{54}"><span data-contrast="auto">The coffee market has also been on fire recently, not least driven by Robusta coffee, which has reached a fresh record high as farmers in top producer Vietnam hold back on sales in anticipation of even higher prices. A move that has only been made possible by near record low stockpiles in exchange monitored warehouses. In addition, the Brazilian production of Arabica coffee has also disappointed, and with exchange monitored stocks at a 1999 low, a current lack of containers in Brazil leading to port congestions, as well as the Red Sea disruptions have all supported prices recently.&nbsp;<br /> <br /> <span data-contrast="auto">Some of the above-mentioned&nbsp;bullish drivers may eventually solve themselves, thereby lifting supply, and while it may drive a long overdue correction, the underlying support from weather related tightness is unlikely to go away until the impact of El Ni&ntilde;o starts to ease. </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <span data-contrast="auto"> <br /> <br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></div></div></div><div class="article-image"><img alt="25olh_crop4" src="https://www.home.saxo/-/media/content-hub/images/2024/january/25olh_crop4.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>23 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024">Silver and copper in focus after recent declines</a><br /> 19 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a></span><span><br /> 17 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a></span><span><br /> 16 Jan 2024:</span><span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a></span><span><br /> 12 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a></span><span><br /> 9 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a></span><span><br /> 5 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a></span><span><br /> 4 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a></span><span><br /> 4 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a></span><span><br /> 21 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a></span><span><br /> 19 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a></span><span><br /> 14 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a></span><span><br /> 13 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a></span><span><br /> 12 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a></span><span><br /> 1 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a></span><span><br /> 30 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a></span><span><br /> 23 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a></span><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a></span><span><br /> 22 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a></span><span>?<br /> 17 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a></span><span><br /> 16 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-16-nov-2023---commodities-16112023"><strong><span>Podcast: Silver comeback, watch OPEC as crude oil slides lower</span></strong></a></span><span><br /> 16 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-weakness-adds-focus-to-upcoming-opec-meeting-16112023"><strong><span>Crude oil weakness adds focus to upcoming OPEC meeting</span></strong></a></span><span><br /> 15 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/soft-cpi-lifts-gold-and-beaten-down-silver-and-platinum-15112023"><strong><span>Soft CPI lifts gold and beaten down silver and platinum</span></strong></a></span><span><br /> 12 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/copper-update---21-november-2023-21112023"><strong><span>Copper supported by green transformation demand and peak rate speculation</span></strong></a></span><span>&nbsp;<br /> 10 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---10-november-2023-10112023"><strong><span>Commodity weekly: Crude oil risks overshooting the downside</span></strong></a></span></p> <p><strong><span>Previous "Commitment of Traders" articles<br /> <br /> </span></strong><span>22 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024">COT: Commodities short-selling on the rise amid China woes and Fed caution</a><br /> 15 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a></span><span><br /> 8 Jan 2024<strong>:&nbsp;</strong></span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a></span><strong><span><br /> </span></strong><span>18 Dec 2023:</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a></span><span><br /> 11 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a></span><span><br /> 4 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a></span><span><br /> 20 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023"><strong><span>COT: Crude selling slows, grains in demand</span></strong></a></span><span><br /> 14 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023"><strong><span>COT: Crude long slumps; agriculture sector in demand</span></strong></a></span></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Inflation</span> <span>Federal Reserve</span> <span>Crude Oil</span> <span>Gas Oil</span> <span>Heating Oil</span> <span>Oil</span> <span>Oil and Gas</span> <span>China</span></div>Thu, 25 Jan 2024 13:30:00 Z2024-03-27T10:51:40Z{EB7FC8EA-9C8F-4063-8FE9-4AECD3993123}https://www.home.saxo/content/articles/commodities/crude-oil-supported-by-tightening-fuel-outlook-24012024Ole Hansenproduct-commoditiesInflationFederal Reservecommodity-crude oilcommodity-gas oilcommodity-heating oilOilsector-Oil and Gasplace-lc/cnCrude oil: Disruption risks drive specs into Brent; distorted EIA report up next<div class="article-excerpt">Crude oil remains stuck in a tight range but with a succession of higher lows since pointing to limited selling appetite.</div><div class="article-rte"><div class="rte--output"><span></span> <div> <p paraid="1671311034" paraeid="{34447e95-309f-4655-b7b4-e412c0da70cc}{130}"><span data-contrast="auto">Crude oil remains stuck in a tight range with Brent and WTI having struggled all month to gain a foothold above $80 and $75, respectively. However, a succession of higher lows since December, when the Red Sea crisis began, point to limited selling appetite from traders worried that geopolitical tensions in the Middle East may escalate to threaten supply from key producers in the region. While such an outcome stays very unlikely, the risk has nevertheless managed to support prices which otherwise may have traded lower amid ample supply and soft demand.&nbsp;<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="1757444522" paraeid="{34447e95-309f-4655-b7b4-e412c0da70cc}{174}"><span data-contrast="auto">In WTI, a sustained break above $75.50 could see it target the 200-day SMA at $77.6 with $80 being the next major psychological level after that. The rising trendline is currently providing support at $71.</span><span data-ccp-props="{'134233117':false,'134233118':false,'201341983':0,'335551550':1,'335551620':1,'335559685':0,'335559737':0,'335559738':0,'335559739':160,'335559740':276}"></span></p> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="24olh_oil2" src="https://www.home.saxo/-/media/content-hub/images/2024/january/24olh_oil2.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><div> <div> <p paraid="2114154620" paraeid="{34447e95-309f-4655-b7b4-e412c0da70cc}{187}"><span data-contrast="auto">Large m</span><span data-contrast="auto">oney managers such as hedge funds and CTA&rsquo;s have, since early December when the Red Sea crisis started, increasingly been diverging their crude oil exposure away from WTI towards Brent. According to weekly </span><span data-contrast="none"><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024">Commitment of Traders</a></span><span data-contrast="auto"> reports provided by the major futures exchanges in the US and Europe, the combined net long in WTI and Brent slumped to a 12-year low in early December at 171k contracts or 171 million barrels, with the split between Brent and WTI being 57% and 43%.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="59807798" paraeid="{34447e95-309f-4655-b7b4-e412c0da70cc}{235}"><span data-contrast="auto">However, the combination of the Red Sea crisis disrupting normal supply routes and rising US production have since then triggered a major divergence between the two. While the general rally in crude oil from the early December lows has seen the total net long jump by 85% to 317k contracts, the split between Brent and WTI has decisively moved in favor of Brent with 72% of the total net long being Brent. Investors appear to have concluded production growth will continue to pressure prices in the United States while the Middle East conflict will provide some support for prices in Europe and Asia.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div></div></div><div class="article-image"><img alt="24olh_oil3" src="https://www.home.saxo/-/media/content-hub/images/2024/january/24olh_oil3.png"/></div><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>23 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024">Silver and copper in focus after recent declines</a><br /> 19 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a></span><span><br /> 17 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a></span><span><br /> 16 Jan 2024:</span><span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a></span><span><br /> 12 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a></span><span><br /> 9 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a></span><span><br /> 5 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a></span><span><br /> 4 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a></span><span><br /> 4 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a></span><span><br /> 21 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a></span><span><br /> 19 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a></span><span><br /> 14 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a></span><span><br /> 13 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a></span><span><br /> 12 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a></span><span><br /> 1 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a></span><span><br /> 30 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a></span><span><br /> 23 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a></span><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a></span><span><br /> 22 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a></span><span>?<br /> 17 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a></span><span><br /> 16 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-16-nov-2023---commodities-16112023"><strong><span>Podcast: Silver comeback, watch OPEC as crude oil slides lower</span></strong></a></span><span><br /> 16 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-weakness-adds-focus-to-upcoming-opec-meeting-16112023"><strong><span>Crude oil weakness adds focus to upcoming OPEC meeting</span></strong></a></span><span><br /> 15 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/soft-cpi-lifts-gold-and-beaten-down-silver-and-platinum-15112023"><strong><span>Soft CPI lifts gold and beaten down silver and platinum</span></strong></a></span><span><br /> 12 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/copper-update---21-november-2023-21112023"><strong><span>Copper supported by green transformation demand and peak rate speculation</span></strong></a></span><span>&nbsp;<br /> 10 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---10-november-2023-10112023"><strong><span>Commodity weekly: Crude oil risks overshooting the downside</span></strong></a></span></p> <p><strong><span>Previous "Commitment of Traders" articles<br /> <br /> </span></strong><span>22 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024">COT: Commodities short-selling on the rise amid China woes and Fed caution</a><br /> 15 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a></span><span><br /> 8 Jan 2024<strong>:&nbsp;</strong></span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a></span><strong><span><br /> </span></strong><span>18 Dec 2023:</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a></span><span><br /> 11 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a></span><span><br /> 4 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a></span><span><br /> 20 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023"><strong><span>COT: Crude selling slows, grains in demand</span></strong></a></span><span><br /> 14 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023"><strong><span>COT: Crude long slumps; agriculture sector in demand</span></strong></a></span></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Inflation</span> <span>Federal Reserve</span> <span>Crude Oil</span> <span>Gas Oil</span> <span>Heating Oil</span> <span>Oil</span> <span>Oil and Gas</span> <span>China</span></div>Wed, 24 Jan 2024 12:30:00 Z2024-03-27T10:51:41Z{67808800-863E-4895-92E6-312FB5222F43}https://www.home.saxo/content/articles/commodities/silver-and-copper-in-focus-after-recent-declines-23012024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal ReserveMiningFocus Inflationcommodity-coppercompany-freeport-mcmoran copperSilver and copper in focus after recent declines<div class="article-excerpt">Silver prices hit a two-month low on Monday, with the trigger being a technical break below key support while the driver was an ongoing risk aversion towards metals depending on growth and demand, not least in China</div><div class="article-rte"><div class="rte--output"><div> <p paraid="2078619860" paraeid="{a61952c4-dd68-464d-a35d-bd8ec583e78c}{117}"><span data-contrast="auto">Silver prices hit a two-month low on Monday, with the trigger being a technical break below key support while the driver was an ongoing risk aversion towards metals depending on growth and demand, not least in China, the world&rsquo;s top consumer, where the economic outlook continues to darken with stock markets in Hong Kong and Shanghai hitting multi-year lows. With gold continuing to attract support above $2000 in anticipation of rate cuts, lower inflation and continued central bank demand, the XAUXAG ratio has risen to a 15-month high, reflecting silver&rsquo;s relative cheapness.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="2045651264" paraeid="{a61952c4-dd68-464d-a35d-bd8ec583e78c}{155}"><span data-contrast="auto">Since early December when silver, together with gold, saw a premature and unsustainable spike, the price has suffered a relatively steep fall, culminating in Monday&rsquo;s technical drop below support-turned-resistance at $22.50. With gold holding steady around $2025, the gold-silver ratio briefly spiked above 92 (ounces of silver to one ounce of gold) before bargain hunters appeared to provide support. For the market to recover its poise a break back above $22.50 is the minimum requirement, with the steep downtrend from December offering a later challenge just below $23. A sustained break lower could see short sellers target channel support in the $21.50 area.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <p><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <div> <div> <h3><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="23olh_metal1" src="https://www.home.saxo/-/media/content-hub/images/2024/january/23olh_metal1.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><span data-contrast="auto"><a href="https://www.saxotrader.com/sim/instant-demo/InstantDemo-EN-GL/page/product/FxSpot/8177?activeTab=overview&amp;cmpid=copy_link_platform_sharing"></a></span> <div> <div> <p><span data-contrast="auto"><span data-contrast="auto"><span data-contrast="auto">Just like gold, silver has seen net selling from ETF investors since 2022, when the Federal Reserve embarked on its aggressive rate hike cycle, with current total holdings at 694 million ounces being the weakest since May 2020. Meanwhile, in the futures market, speculators such as hedge funds and CTAs held a 6,000 contract, or 30 million ounce long in the week to January 19, not far below the one-year average around 11,000 contracts. Do note that this group tends to anticipate, accelerate, and amplify price changes that have been set in motion by fundamentals. Being followers of momentum, this strategy often sees this group of traders buy into strength and sell into weakness, meaning that they are often found holding the biggest long near the peak of a cycle or the biggest short position ahead of a through in the market.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span> </span><span data-ccp-props="{'134233117':false,'134233118':false,'201341983':0,'335551550':1,'335551620':1,'335559685':0,'335559737':0,'335559738':0,'335559739':160,'335559740':276}"></span><span data-ccp-props="{'134233117':false,'134233118':false,'201341983':0,'335551550':1,'335551620':1,'335559685':0,'335559737':0,'335559738':0,'335559739':160,'335559740':276}"></span></span></p> <h3 paraid="1033937941" paraeid="{40b2c94f-ca78-4b98-88a6-b55cc697fffa}{234}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <div> <p paraid="1425391661" paraeid="{7ae875e5-8831-4f3d-9c4d-e0eec23f9053}{112}"><span data-ccp-props="{'134233117':false,'134233118':false,'335559738':0,'335559739':0}"></span></p> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></div></div><div class="article-image"><img alt="23olh_metal2" src="https://www.home.saxo/-/media/content-hub/images/2024/january/23olh_metal2.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <p paraid="1989187661" paraeid="{a61952c4-dd68-464d-a35d-bd8ec583e78c}{239}"><span data-contrast="auto">Copper meanwhile remains rangebound with China growth concerns being offset by speculation the Chinese government will have to do more to support an ailing economy, and not least the prospect for a tightening market outlook as the green transformation continue to gather momentum and miners cutting their production forecasts as they being challenged with harder-to-mine deposits, rising costs, water restrictions and increased scrutiny of new permits.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1083720650" paraeid="{a61952c4-dd68-464d-a35d-bd8ec583e78c}{245}"><span data-contrast="auto">Industrial metals have generally posted a weak start to the year as the outlook for global and not least Chinese manufacturing and construction activity still is under scrutiny, for now more than offsetting calls for stronger stimulus measures in China, and the potential positive impact of restocking once an expected series of rate cuts from major central banks begin later this year. The Bloomberg Industrial Metal index trades down around 4% on the month with losses being led by aluminum and zinc while copper, for the above-mentioned reasons has managed to limit the losses, despite some recent aggressive selling from speculators in the futures market.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="580635337" paraeid="{56c08937-7c04-4d61-ad58-cd3583d49433}{22}"><span data-contrast="auto">According to the latest </span><span data-contrast="none"><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024">Commitment of Traders</a></span><span data-contrast="auto"> report from the CFTC, speculators had during a two-week period to January 16 shifted their net position in the HG futures contract from a 10k long to a 25k short, the biggest bet on lower prices since July 2022. Combining this observation with a volume weighted average price (VWAP) during this two-week selling period around $3.8050, and the risk of another short squeeze may attract fresh attention should the price manage to break higher from here. We maintain a positive outlook for copper given the prospect of an increasingly tight market towards the second half of the year, but given current China worries and ongoing speculation about the timing, pace and depth of incoming US rate cuts, the short-term direction will likely be decided by short-term trading strategies.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1083069895" paraeid="{56c08937-7c04-4d61-ad58-cd3583d49433}{81}"><span data-contrast="auto">HG copper is currently trading near the center of a 40-cent wide range, and following early January weakness the market is now showing signs of consolidating with a band of key moving averages offering resistance between $3.79 and $3.825.</span></p> </div></div></div><div class="article-image"><img alt="23olh_metal3" src="https://www.home.saxo/-/media/content-hub/images/2024/january/23olh_metal3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>19 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024"><strong><span>Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</span></strong></a></span><span><br /> 17 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a></span><span><br /> 16 Jan 2024:</span><span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a></span><span><br /> 12 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a></span><span><br /> 9 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a></span><span><br /> 5 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a></span><span><br /> 4 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a></span><span><br /> 4 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a></span><span><br /> 21 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a></span><span><br /> 19 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a></span><span><br /> 14 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a></span><span><br /> 13 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a></span><span><br /> 12 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a></span><span><br /> 1 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a></span><span><br /> 30 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a></span><span><br /> 23 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a></span><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a></span><span><br /> 22 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a></span><span>?<br /> 17 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a></span><span><br /> 16 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/podcast/podcast-16-nov-2023---commodities-16112023"><strong><span>Podcast: Silver comeback, watch OPEC as crude oil slides lower</span></strong></a></span><span><br /> 16 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-weakness-adds-focus-to-upcoming-opec-meeting-16112023"><strong><span>Crude oil weakness adds focus to upcoming OPEC meeting</span></strong></a></span><span><br /> 15 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/soft-cpi-lifts-gold-and-beaten-down-silver-and-platinum-15112023"><strong><span>Soft CPI lifts gold and beaten down silver and platinum</span></strong></a></span><span><br /> 12 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/copper-update---21-november-2023-21112023"><strong><span>Copper supported by green transformation demand and peak rate speculation</span></strong></a></span><span>&nbsp;<br /> 10 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---10-november-2023-10112023"><strong><span>Commodity weekly: Crude oil risks overshooting the downside</span></strong></a></span></p> <p><strong><span>Previous "Commitment of Traders" articles<br /> <br /> </span></strong><span>22 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024">COT:&nbsp;Commodities short-selling amid China woes and Fed caution</a><br /> 15 Jan 2024:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a></span><span><br /> 8 Jan 2024<strong>:&nbsp;</strong></span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a></span><strong><span><br /> </span></strong><span>18 Dec 2023:</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a></span><span><br /> 11 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a></span><span><br /> 4 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a></span><span><br /> 20 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023"><strong><span>COT: Crude selling slows, grains in demand</span></strong></a></span><span><br /> 14 Nov 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023"><strong><span>COT: Crude long slumps; agriculture sector in demand</span></strong></a></span></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Mining</span> <span>Focus Inflation</span> <span>Copper</span> <span>Freeport-mcmoran Copper</span></div>Tue, 23 Jan 2024 10:30:00 Z2024-03-27T10:51:41Z{72B29841-C49E-457A-9466-99A4C8CE3A7F}https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---22-jan-2024-22012024Ole Hansenproduct-commoditiesCOT Commoditiescommodity-crude oilcommodity-natural gascommodity-goldcommodity-silvercommodity-coppercommodity-platinumcommodity-corncommodity-sugarcommodity-coffeecommodity-gasolinecommodity-palladiumcommodity-wheatcommodity-cocoacommodity-cottoncommodity-cattlesector-gics-1010product-forexCOT FXforex-eurusdforex-usdjpyforex-audusdforex-usdcadforex-usdchfforex-gbpusdforex-nzdusdsubject-is/fin.stpbondBonds Inspirationproduct-bondsproduct-forexEn hurtig tankeCOT: Commodities short-selling on the rise amid China woes and Fed caution<div class="article-excerpt">Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to last Tuesday, January 16</div><div class="article-rte"><div class="rte--output"><em>Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities while in forex we use the broader measure called non-commercial.</em></div></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>What is the Commitments of Traders report?</span></h3> <br /> <p>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.</p> <p>Commodities: Producer/Merchant/Processor/User, Swap dealers,&nbsp;<span>Managed Money</span>&nbsp;and other<br /> Financials: Dealer/Intermediary; Asset Manager/Institutional;&nbsp;<span>Leveraged Funds</span>&nbsp;and other<br /> Forex: A broad breakdown between commercial and&nbsp;<span>non-commercial</span>&nbsp;(speculators)</p> <p>The main reasons why we focus primarily on the behavior of speculators, such as hedge funds and trend-following CTA's are:</p> <ul> <li>They are likely to have&nbsp;<span>tight stops</span>&nbsp;and&nbsp;<span>no underlying exposure</span>&nbsp;that is being hedged</li> <li>This makes them&nbsp;<span>most reactive to changes</span>&nbsp;in fundamental or technical price developments</li> <li>It provides views about&nbsp;<span>major trends</span>&nbsp;but also helps to decipher when a&nbsp;<span>reversal</span>&nbsp;is looming</li> </ul> <p>Do note that&nbsp;<span >this group tends to <strong>anticipate, accelerate, and amplify</strong> price changes that have been set in motion by <strong>fundamentals</strong>. Being followers of momentum, this strategy often sees this group of traders buy into strength and sell into weakness, meaning that they are often found holding the biggest long near the peak of a cycle or the biggest short position ahead of a through in the market.</span></p></div></div><div class="article-additional-rte"><div class="rte--output"><span></span> <div> <span></span> <span></span> <div> <span></span> <div> <div> <div> <div> <div> <div> <div> <span></span> <div> <div> <span data-contrast="none"></span><span></span> <div> <span data-contrast="none"></span> <div> <span data-contrast="none"></span> <div> <span></span> <span></span> <div> <p paraid="908742473" paraeid="{9dc17bdc-2b11-4bfd-b9b9-624ec6b0c42a}{57}"><span data-contrast="none">This summary highlights futures positions and changes made by hedge funds across commodities and forex in the week to last Tuesday, January 16. A week that saw the market take a raincheck on the timing, pace, and depth of future US rate cuts after Fed Governor Waller urged caution, pushing back against market bets pointing to six rate cuts this year. Bond yields, especially at the front end of the curve, rose while the dollar continued its January short covering bounce. Commodities meanwhile saw broad selling being led by the grains sector, and hedge funds reacted accordingly with a 40% drop in the net long across 24 major commodities futures being driven by a jump in short bets.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559740':259}"></span></p> </div> <div> <p paraid="1282855158" paraeid="{9dc17bdc-2b11-4bfd-b9b9-624ec6b0c42a}{113}"><span data-ccp-props="{'201341983':0,'335559740':259}">&nbsp;</span></p> </div> <div> <h3 class="article-heading--3"><span data-contrast="none">Commodities:</span>&nbsp;</h3> </div> <div> The Bloomberg Commodity index, which tracks a basket of 24 major futures markets split between energy (30.1%), metals (34.2%) and agriculture (35.7%), traded down 1% on the week as a troubled start to the year continued. All sectors, except softs and livestock traded lower led by grains (-3.1%) and energy (-1.4%), where a 9% slump in natural gas more than offset small US cold weather-related gains in fuel products while crude oil remained stuck within its established range.&nbsp; <p><span><br /> The grain sector remains under pressure from improved crop weather in Brazil, adding to the risk of a large carryout this summer after recent stock upgrades saw soybean futures drop to their lowest level in more than two years and corn futures set a three-year low. Responding to these developments speculators now hold a net short position across all six soy and grains futures, the extent to which has only been seen once before since at least 2006. In the week to January 16, the last remaining long position in soymeal also flipped to a net short. Overall, the near 500,000 contract net short represents a nominal value of $15 billion.</span></p> </div> <div> <p paraid="1815481085" paraeid="{9dc17bdc-2b11-4bfd-b9b9-624ec6b0c42a}{183}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div> </div> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}" ></span></div> </div> <p paraid="1396398248" paraeid="{a9890f65-bd09-43ce-b941-e232248f0c46}{133}"><span data-contrast="auto"> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p><span> </span></p> <p><span> </span></p> </div> </div> </div> <div> <span data-ccp-props="{'201341983':0,'335559740':259}" ></span></div> </div> </div> <div> <p paraid="739880928" paraeid="{6472d595-91b7-4440-89e9-890d4acd9c8e}{166}"><span data-contrast="none"> </span></p> </div> <p><span> </span></p> </div> <div> <p paraid="1053527918" paraeid="{f64664da-5092-46b8-866f-464e46bdf07a}{149}"><span data-ccp-props="{}"></span></p> </div> </div> </div> </div></div></div><div class="article-image"><img alt="22olh_COT2" src="https://www.home.saxo/-/media/content-hub/images/2024/january/22olh_cot2.png"/></div><div class="article-additional-rte"><div class="rte--output"><p class="text--body">Overall developments that saw net long futures position held hedge funds and CTA&rsquo;s extend their recent slump to an August 2019 low at 151.5k contracts, representing a nominal value of $43 billion, and the weakest position held at the start of any year since 2015. Net selling was seen in 16 out of 24 contracts with the grains sector once again seeing the bulk with all metals, both precious and industrial also seeing net sales. In nominal terms the selling was led by soybeans, WTI crude oil, gold and copper with buyers focusing on Brent crude and natural gas.&nbsp;</p> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></div></div><div class="article-image"><img alt="22olh_cot1" src="https://www.home.saxo/-/media/content-hub/images/2024/january/22olh_cot1.png"/></div><div class="article-image"><img alt="22olh_COT3" src="https://www.home.saxo/-/media/content-hub/images/2024/january/22olh_cot3.png"/></div><div class="rte--output">Energy: Selling of WTI offset buying of Brent leaving the net nearly unchanged while only slight changes were seen among the fuel products. A 33k contract buying of natural gas was mostly driven by short covering as the price dropped by 9%. </div><br/><div class="article-image"><img alt="22olh_cot4" src="https://www.home.saxo/-/media/content-hub/images/2024/january/22olh_cot4.png"/></div><div class="rte--output">Metals: Broad selling across the sector as the dollar strengthened and traders dialed back the timing of the first US rate cut. China growth concerns drove a 51% jump in the copper short to an 18-month high, while the platinum long was extinguished.</div><br/><div class="article-image"><img alt="22olh_cot5" src="https://www.home.saxo/-/media/content-hub/images/2024/january/22olh_cot5.png"/></div><div class="rte--output">Grains: Speculators were net sellers for a fifth week, driving the net short to a May 2019 high near 500,000 contracts, with corn representing more than half at 261k followed by soybeans (-77k) and CBT wheat (-69k).</div><br/><div class="article-image"><img alt="22olh_cot6" src="https://www.home.saxo/-/media/content-hub/images/2024/january/22olh_cot6.png"/></div><div class="rte--output">In softs, the sugar long dropped to a 14-month low, the Arabica coffee long reached a fresh 17-month high while a renewed cocoa price spike and a recovering cotton both attracted demand..</div><br/><div class="article-image"><img alt="22olh_cot7" src="https://www.home.saxo/-/media/content-hub/images/2024/january/22olh_cot7.png"/></div><div class="rte--output">In forex, the flows were broadly skewed towards dollar buying as the DXY continued its January bounce amid rising Treasury yields and reduced bets on a March rate cut. Overall, the speculative dollar short vs eight IMM futures and DXY was reduced by 23% to $9.1 bn. Selling being led by EUR and AUD, and only partly offset by demand for GBP</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>19 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024">Commodity weekly: Middle East, US rates, Bitcoin ETFs &amp; Freight rates</a><br /> 17 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024"><strong><span>Natural gas focus switch from cold to milder weather ahead</span></strong></a><span><br /> 16 Jan 2024:</span><a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"><strong><span>&nbsp;Data dependent precious metals continue their bumpy ride</span></strong></a><span><br /> 12 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024"><strong><span>Commodity Weekly: Geopolitical risks lift crude and gold prices</span></strong></a><span><br /> 9 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a><span><br /> 5 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> 21 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a><span><br /> 19 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a><span><br /> 14 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a><span><br /> 13 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a><span><br /> 12 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a><span><br /> 1 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a><span><br /> 30 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a><span><br /> 23 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a><span><br /> 22 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a><span>?<br /> 17 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a><span><br /> 16 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-16-nov-2023---commodities-16112023"><strong><span>Podcast: Silver comeback, watch OPEC as crude oil slides lower</span></strong></a><span><br /> 16 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-weakness-adds-focus-to-upcoming-opec-meeting-16112023"><strong><span>Crude oil weakness adds focus to upcoming OPEC meeting</span></strong></a><span><br /> 15 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/soft-cpi-lifts-gold-and-beaten-down-silver-and-platinum-15112023"><strong><span>Soft CPI lifts gold and beaten down silver and platinum</span></strong></a><span><br /> 12 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/copper-update---21-november-2023-21112023"><strong><span>Copper supported by green transformation demand and peak rate speculation</span></strong></a><span>&nbsp;<br /> 10 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---10-november-2023-10112023"><strong><span>Commodity weekly: Crude oil risks overshooting the downside</span></strong></a></p> <p><strong><span>Previous "Commitment of Traders" articles</span></strong><strong><span><br /> <br /> </span></strong><span>15 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024"><strong><span>COT: Grains sector slump continues; Mideast risks lift crude demand</span></strong></a><span><br /> 8 Jan 2024<strong><span>:&nbsp;</span></strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><strong><span><br /> </span></strong><span>18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a><span><br /> 20 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023"><strong><span>COT: Crude selling slows, grains in demand</span></strong></a><span><br /> 14 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023"><strong><span>COT: Crude long slumps; agriculture sector in demand</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>COT Commodities</span> <span>Crude Oil</span> <span>Natural Gas</span> <span>Gold</span> <span>Silver</span> <span>Copper</span> <span>Platinum</span> <span>Corn</span> <span>Sugar</span> <span>Coffee</span> <span>Gasoline</span> <span>Palladium</span> <span>Wheat</span> <span>Cocoa</span> <span>Cotton</span> <span>Cattle</span> <span>Energy (Sector)</span> <span>Forex</span> <span>COT FX</span> <span>EURUSD</span> <span>USDJPY</span> <span>AUDUSD</span> <span>USDCAD</span> <span>USDCHF</span> <span>GBPUSD</span> <span>NZDUSD</span> <span>Government Bonds</span> <span>Bonds nspiration</span> <a href="https://www.home.saxo/insights/news-and-research/bonds">Bonds</a> <a href="https://www.home.saxo/insights/news-and-research/forex">Forex</a> <span>En hurtig tanke</span></div>Mon, 22 Jan 2024 09:30:00 Z2024-03-27T10:51:44Z{373E9401-56F5-4C59-B6BE-FA40B806036E}https://www.home.saxo/content/articles/commodities/commodity-weekly---19-jan-2024-19012024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal Reservecommodity-gas oilcommodity-crude oilcommodity-heating oilsector-Oil and GasOilcommodity-copperAgricultureplace-lc/cnHighlighted articlescommodity-wheatIron Orecommodity-natural gasCommodity weekly: Middle East and rates key drivers; Bitcoin ETFs first week and freight rates<div class="article-excerpt">Commodities have yet to record a winning week in 2024 with losses in grains and metals being partly offset by gains in energy and softs. Also a look at surging container rates and the first week of Bitcoin ETF trading. </div><div class="article-rte"><div class="rte--output"><p><span>Commodities have yet to record a winning week in 2024 with the Bloomberg Commodity Index, which tracks the performance of 24 major commodity futures spread almost evenly between energy, metals and agriculture trading lower by around 1% so far this month. Losses in grains, industrial as well as precious metals have only been partly offset by a gain in energy and soft commodities. The market&rsquo;s main focus remains geopolitical tensions in the Middle East, China economic weakness and not least the timing, pace and depth of US rate cuts in 2024. </span></p> <p><span>The grain sector remains under pressure from improved crop weather in Brazil, adding to the risk of a large carryout this summer after recent stock upgrades saw soybean futures drop to their lowest level in more than two years and corn futures set a three-year low. </span></p> <p><span>The industrial metal sector, meanwhile, has been struggling amid weak economic data coming out of China and the government holding off from implementing major stimulus despite the deepening property crisis and consumers holding back on spending. Precious metals have softened in line with a stronger dollar and bond yields moving higher after stronger than expected US economic data raised doubts about the timing of the first rate cut. In addition, we saw comments from central bankers in the US and Europe push back against market views on how quickly rates might ease. </span></p> <p><span> </span></p> <p><span> </span></p></div></div><div class="article-image"><img alt="19olh_wcu1" src="https://www.home.saxo/-/media/content-hub/images/2024/january/19olh_wcu1.png"/></div><div class="article-additional-rte"><div class="rte--output"><p><span> </span></p> <div> <h3 class="article-heading--3"><span>Crude oil rangebound despite cold weather boost and Middle East risks</span></h3> <p><span>The energy sector continues to trade within a relatively narrow range with rising concerns about the stability in the Middle East where Houthis continue to send waves of Iranian-produced missiles and drone strikes on ships in the Red Sea while the US military launched multiple airstrikes against targets in Yemen. A deeper involvement by Iran this past week added to worries that the conflict, albeit highly unlikely, may end up impacting the flow of oil and gas from key Middle Eastern producers. Also supporting crude, and especially fuel prices this past week, was a severe cold snap in the US which sent demand sharply higher while temporarily cutting production of oil and gas due to </span><span>freeze-offs &ndash; when low temperatures freeze wells and other equipment. The cold &lsquo;bomb&rsquo; also triggered record demand for natural gas, the fuel of choice for power generators over coal as prices remain relatively low. </span></p> <p><span>Overall, we see Brent crude oil remain rangebound around $80 per barrel during the first quarter with the very weak positioning, OPEC+ production restraint, and incoming rate cuts potentially leaving the risk/reward skewed slightly to the upside. The biggest downside risk is a disunited OPEC+ leading to a collapse in the current agreement to keep production down, and the upside from a major geopolitical event disrupting the flow of crude oil and gas from the Middle East.</span></p> <h3 class="article-heading--3">Soft commodities extend last years strong gains</h3> <br /> The softs sector &ndash; last year&rsquo;s best performing sector &ndash; saw a renewed surge, led by sugar, cotton and coffee, especially the Robusta variety which raced to a record $3175 per ton. Primarily produced in Vietnam, the bean has seen low levels of exchange-monitored stocks being made worse by farmers in Vietnam holding back parts of a shrinking production in anticipation of even higher prices. In addition, the Red Sea turmoil that&rsquo;s impacting shipping routes from Asia to Europe has also hit the market for Robusta beans with buyers shunning purchases from Asia due to surging shipping costs and longer-than-normal travel routes. Buyers have instead been trying to secure more supplies from Brazil, highlighting how the normal flow of goods around the world has once again been upended.<br /> <br /> <p><span>The relentless rise in global container freight rates continue with the Drewry composite showing a weekly rise of 23% to $3,777 per 40 ft box, a 173% increase since late Nov, with the most recent gains being led by +35% increases on routes from China to New York and Los Angeles. Since the Red Sea crisis began in early December the cost of shipping a container from the Shanghai to Europe through the Red Sea to the Suez Canal has jumped by more than 300%, raising the cost to consumers while delaying the arrival of goods. </span></p> </div></div></div><div class="article-image"><img alt="19olh_wcu3" src="https://www.home.saxo/-/media/content-hub/images/2024/january/19olh_wcu3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>Industrial metals and miners troubled start to 2024</span></h3> <p><span>Industrial metals have posted a weak start to the year as the outlook for global manufacturing and construction remains under scrutiny, for now more than offsetting calls for stronger stimulus measures in China, and the potential positive impact of restocking once an expected series of rate cuts from major central banks begin later this year. The Bloomberg Industrial Metal index trades down 5% on the month with losses being led by aluminum and zinc. </span></p> <p><span>Copper prices, meanwhile, remains mostly rangebound as China and rest of the world demand worries continue to be offset by miners cutting their production forecasts driven by, among others, declining ore quality, water restrictions and increased scrutiny of new permits. The combination of supply worries together with a strong push towards electrification, not least in China, continue to provide support in the short term. However, to see a sustained rally towards a fresh record high, the market will need answers to the questions about the timing of and depth of future US rate cuts. Only then may we see renewed restocking by companies that offloaded metals last year amid the rising cost of financing their stockpiles.</span></p> <p><span>Mining companies, meanwhile continue their struggle to control costs towards labor, fuel, and materials during a time when rising interest rates and inflation have added to the overall cost of funding and running a business which increasingly has been struggling with harder-to-mine deposits and lower ore grades. Increased Environmental, Social, and Corporate Governance (ESG) scrutiny by investors, rising regulatory costs and government intervention have also been weighing. These developments have all helped drive the sector lower with the shown example, the Vaneck Global Mining ETF, trading down 10% this month and 15% during the past year. </span></p> <h3 class="article-heading--3"><span></span><span data-contrast="auto"> <br /> </span></h3></div></div><div class="article-image"><img alt="19olh_wcu4" src="https://www.home.saxo/-/media/content-hub/images/2024/january/19olh_wcu4.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><p><span>All the major miners, except those operating in the uranium business, trade lower on the month, led by Newmont and Barrick Gold Corp. Earlier in the week, Barrick&rsquo;s stock plunged the most since August 2020 after the Canadian miner reported higher costs and lower-than-expected gold sales for its last quarter. These developments, together with expectations for rising demand in the coming years for precious metals as funding costs come down, and most importantly for green transformation metals as the electrification of the world gathers momentum, basically mean that higher commodity prices will be needed to incentivize higher production. Until such time, the mining industry may struggle to deliver the returns, making the sector attractive from an investment perspective.</span></p> <p><span>As mentioned, the exception to this is the uranium mining industry, which has seen the price of its product surge higher in recent months amid a tightening market driven by increased demand, not only from utilities, but also increasingly from funds investing in physical uranium and oxides. An example being Cameco Corp in Canada which trades up 10% on the month and nearly 90% over the past year.</span><strong ></strong></p> <h3 class="article-heading--3"><span>Gold&rsquo;s current dollar and economic data fixation</span></h3> <p><span>The precious metals sector trades down on the month with gold and silver both stuck in ranges while speculation continues about the timing, pace and depth of future US and EU rate cuts. Until the first cut is delivered, the market may at times run ahead of itself, in the process building up rate cut expectations to levels that leave prices vulnerable to a correction, like to one we saw during the week when gold almost touched $2000. With that in mind, the short-term direction of gold and silver will continue to be dictated by incoming economic data and their impact on the timing and pace of future rate cuts. Gold&rsquo;s weakness this past week was initially driven by the stronger dollar but after once again finding support, the yellow metal saw fresh buying interest, potentially helped along by a small geopolitical risk premium being added to the price. </span></p> <p><span>Recently, Saxo&rsquo;s strategy team released their </span><span><a href="https://www.home.saxo/insights/news-and-research/thought-leadership/quarterly-outlook"><span>Q1 2024 outlook</span></a></span><span> titled &ldquo;What happened to the future?&rdquo;. In the commodities section, we outlined the reasons why we believe 2024 could become the &ldquo;</span><span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><span>Year of the metals</span></a></span><span>&rdquo; with focus on gold, silver, platinum and copper. In precious metals, we believe the prospect for lower real yields and lower funding costs as central bank rate cuts will drive a revival in demand from interest rate-sensitive investors. Adding to these developments a fragmented world supporting continued demand from central banks and haven demand from others, the potential for a fresh record remains on the cards. </span></p> <h3 class="article-heading--3"><span>Bitcoin ETF launch triggers classic market reaction</span></h3> <p><span>In a slight departure from our usual commodity focus we will take a moment to look at the recently launched Bitcoin exchange-traded funds (ETF) and their initial market impact. Bitcoin surged 157% last year, with a big portion of the gains being driven by optimism about the eventual January 11 launch of the first US ETF to directly hold the token. In addition, digital currencies, just like gold, received a late 2023 boost from the prospect of peak rates being followed by loser monetary policy in 2024 &ndash; supportive for non-coupon paying assets like commodities and cryptos. </span></p> <p><span>What we have witnessed following the launch can best be described as a classic &ldquo;buy the rumor, sell the fact&rdquo; scenario, with Bitcoin peaking on the day of the launch at $49000, only to suffer a +15% loss in the days that followed. So far, the correction has not triggered any major technical sell signals, but it has left the early entrants bruised with all ETFs suffering a loss during the first week of trading. From the table below, it&rsquo;s also clear that two winners have emerged out of the ten that were launched &ndash; with BlackRock&rsquo;s iShares Bitcoin Trust and the Fidelity Wise Origin Bitcoin Fund attracting the bulk of inflows, however with the caveat that, instead of being new money, the bulk has come from the sale of Grayscale&rsquo;s Bitcoin Fund, a Trust that began trading in 2013 before the recent conversion to an ETF. </span></p> <p><span>Coinbase, known for its safety and security for investors as well as low transaction fees, emerged as the custodian for most of the recently launched ETFs. Its share price rose more than 400% last year with strong earnings and speculation about the ETF launch giving it a strong boost during the last two months. However, in the weeks up to, and after the launch the share price has corrected by one-third in the realization that low cost ETFs may threaten to erode Coinbase&rsquo;s margins and trading volumes. <br /> </span></p></div></div><div class="article-image"><img alt="19olh_wcu2" src="https://www.home.saxo/-/media/content-hub/images/2024/january/19olh_wcu2.png"/></div><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>17 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024">Natural gas focus switch from cold to milder weather ahead</a><br /> 16 Jan 2024:<a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024"> Data dependent precious metals continue their bumpy ride</a><br /> 12 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024">Commodity Weekly: Geopolitical risks lift crude and gold prices</a><br /> 9 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a><span><br /> 5 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> 21 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a><span><br /> 19 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a><span><br /> 14 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a><span><br /> 13 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a><span><br /> 12 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a><span><br /> 1 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a><span><br /> 30 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a><span><br /> 23 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a><span><br /> 22 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a><span>?<br /> 17 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a><span><br /> 16 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-16-nov-2023---commodities-16112023"><strong><span>Podcast: Silver comeback, watch OPEC as crude oil slides lower</span></strong></a><span><br /> 16 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-weakness-adds-focus-to-upcoming-opec-meeting-16112023"><strong><span>Crude oil weakness adds focus to upcoming OPEC meeting</span></strong></a><span><br /> 15 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/soft-cpi-lifts-gold-and-beaten-down-silver-and-platinum-15112023"><strong><span>Soft CPI lifts gold and beaten down silver and platinum</span></strong></a><span><br /> 12 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/copper-update---21-november-2023-21112023"><strong><span>Copper supported by green transformation demand and peak rate speculation</span></strong></a><span>&nbsp;<br /> 10 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---10-november-2023-10112023"><strong><span>Commodity weekly: Crude oil risks overshooting the downside</span></strong></a></p> <p><strong><span>Previous "Commitment of Traders" articles</span></strong><strong><span><br /> <strong><span></span></strong><br /> </span></strong><span>15 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024">COT: Grains sector slump continues; Mideast risks lift crude demand</a><br /> 8 Jan 2024<strong>:&nbsp;</strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><strong><span><br /> </span></strong><span>18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An under owned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a><span><br /> 20 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023"><strong><span>COT: Crude selling slows, grains in demand</span></strong></a><span><br /> 14 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023"><strong><span>COT: Crude long slumps; agriculture sector in demand</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Gas Oil</span> <span>Crude Oil</span> <span>Heating Oil</span> <span>Oil and Gas</span> <span>Oil</span> <span>Copper</span> <span>Agriculture</span> <span>China</span> <span>Highlighted articles</span> <span>Wheat</span> <span>Iron Ore</span> <span>Natural Gas</span></div>Fri, 19 Jan 2024 13:00:00 Z2024-03-27T10:51:41Z{79E5D98E-C4D7-4E47-B7F3-C0862E912BDD}https://www.home.saxo/content/articles/commodities/natural-gas-focus-switch-from-cold-bomb-to-milder-weather-ahead-17012024Ole Hansenproduct-commoditiesInflationcommodity-natural gascommodity-gas oilsector-gics-1010En hurtig tankeNatural gas focus switch from cold ‘bomb’ to milder weather ahead<div class="article-excerpt">US natural gas prices slumped on Tuesday by the most in ten months</div><div class="article-rte"><div class="rte--output"><div> <p paraid="124873514" paraeid="{f7706394-66ca-49de-bfff-117796efa82e}{125}"><span data-contrast="auto">US natural gas prices slumped on Tuesday by the most in ten months, leaving a lot of traders scrambling to reduce their long exposure at a time where extreme weather developments in the US have seen a price supportive spike in demand as well as a major slump in production. A polar vortex sending frigid temperatures across the US this past week has resulted in record demand for gas, the fuel of choice for power generators over coal as gas prices remain relatively low, thereby acceleration withdrawals from underground storage facilities. This follows a relatively mild December where withdrawals were lower than December 2022, amid weaker demand for heating and a strong increase in production relative to the prior year.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="490452222" paraeid="{f7706394-66ca-49de-bfff-117796efa82e}{157}"><span data-contrast="auto">The below charts highlight some of the recent extremes, not least the sharp rise in heating degree days, a measurement designed to quantify the demand for energy needed to heat a building, but also how the winter &lsquo;bomb&rsquo; has forced a temporary reduction in supply to a 13-month due primarily to freeze-offs, when low temperatures freeze wells and other equipment. Overall, these developments have led to a record demand for gas, the impact of which will become visible in the coming weeks when total inventories look set to show an accelerated drop, thereby reducing the current excess of stocks relative to the five-year average, currently at 11.8%.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <p><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <div> <div> <h3><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="17olh_ng1" src="https://www.home.saxo/-/media/content-hub/images/2024/january/17olh_ng1.png"/></div><div class="article-additional-rte"><div class="rte--output"><span data-contrast="auto"><a href="https://www.saxotrader.com/sim/instant-demo/InstantDemo-EN-GL/page/product/FxSpot/8177?activeTab=overview&amp;cmpid=copy_link_platform_sharing"></a></span> <div> <div> <p><span data-contrast="auto"><span data-contrast="auto">From a trading perspective, the short-term direction of gold and silver will continue to be dictated by incoming economic data and their impact on the mentioned timing and pace of future rate cuts. A situation made clear on Monday when ECB&rsquo;s Holzmann pushed back against the market&rsquo;s current pricing of six quarter percent cuts by the European Central Bank this year, giving lingering inflation and geopolitical risks.&nbsp;However, by the time his comments were contradicted by Villeroy, another ECB member, who said that cuts are very likely in 2024 but the timing remains uncertain, the technical damage had already been done resulting in selling from recently established longs. </span><span data-ccp-props="{'134233117':false,'134233118':false,'201341983':0,'335551550':1,'335551620':1,'335559685':0,'335559737':0,'335559738':0,'335559739':160,'335559740':276}"></span><span data-ccp-props="{'134233117':false,'134233118':false,'201341983':0,'335551550':1,'335551620':1,'335559685':0,'335559737':0,'335559738':0,'335559739':160,'335559740':276}"></span></span></p> <h3 paraid="1033937941" paraeid="{40b2c94f-ca78-4b98-88a6-b55cc697fffa}{234}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <div> <p paraid="1425391661" paraeid="{7ae875e5-8831-4f3d-9c4d-e0eec23f9053}{112}"><span data-ccp-props="{'134233117':false,'134233118':false,'335559738':0,'335559739':0}"></span></p> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></div></div><div class="article-image"><img alt="17olh_ng2" src="https://www.home.saxo/-/media/content-hub/images/2024/january/17olh_ng2.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><span>Commodity articles:</span></p> <p>16 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024">Data dependent precious metals continue their bumpy ride</a><br /> 12 Jan 2024:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024">Commodity weekly: geopolitical risks lift crude and gold prices</a><br /> 9 Jan 2024:&nbsp;<a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024">Q1 Outlook &ndash; Year of the metals</a><br /> 5 Jan 2024:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024">Commodity weekly: Bumpy start to 2024</a><br /> 4 Jan 2024:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024">What to watch in crude oil as 2024 gets underway</a><br /> 4 Jan 2024:&nbsp;<a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024">Podcast: Crude oil and gold in focus as a new year begins</a><br /> 21 Dec 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023">Weather, rates and unrest paint muddy picture for commodities in 2023</a><br /> 19 Dec 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023">Crude and gas pop on Red Sea Disruption Risks</a><br /> 14 Dec 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023">Fed's dovish tilt adds fresh fuel to precious metals</a><br /> 13 Dec 2023:&nbsp;<a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023">Video - Why gold may enjoy a Santa rally for the 7th year in a row</a><br /> 12 Dec 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/uranium-12122023">Video - Investing in Uranium</a><br /> 1 Dec 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023">Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</a><br /> 30 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023">Precious metals take top spot for a second month</a><br /> 23 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023">A nervous crude oil market awaits OPEC's next move</a><br /> 23 Nov 2023: Podcast:&nbsp;<a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023">Will Santa deliver another golden gift</a><br /> 22 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023">Will gold and silver see another Santa rally</a>?<br /> 17 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023">Commodity weekly: Crude overshoots; silver the comeback kid</a><br /> 16 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/podcast/podcast-16-nov-2023---commodities-16112023">Podcast: Silver comeback, watch OPEC as crude oil slides lower</a><br /> 16 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/crude-oil-weakness-adds-focus-to-upcoming-opec-meeting-16112023">Crude oil weakness adds focus to upcoming OPEC meeting</a><br /> 15 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/soft-cpi-lifts-gold-and-beaten-down-silver-and-platinum-15112023">Soft CPI lifts gold and beaten down silver and platinum</a><br /> 12 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/copper-update---21-november-2023-21112023">Copper supported by green transformation demand and peak rate speculation</a>&nbsp;<br /> 10 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---10-november-2023-10112023">Commodity weekly: Crude oil risks overshooting the downside</a></p> <p><span>Previous "Commitment of Traders" articles</span><span><br /> <br /> </span>15 Jan 2024:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024">COT: Grains sector slump continues; Mideast risks lift crude demand</a><br /> 8 Jan 2024<span>:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024">COT: Weakest commodities conviction since 2015</a><span><br /> </span>18 Dec 2023:<a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023">COT: Crude long hits 12-year low ahead of FOMC bounce</a><br /> 11 Dec 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023">COT: An underowned commodity sector raising risk of an upside surprise in 2024</a><br /> 4 Dec 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023">COT: Speculators add further fuel to gold rally</a><br /> 20 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023">COT: Crude selling slows, grains in demand</a><br /> 14 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023">COT: Crude long slumps; agriculture sector in demand</a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Inflation</span> <span>Natural Gas</span> <span>Gas Oil</span> <span>Energy (Sector)</span> <span>En hurtig tanke</span></div>Wed, 17 Jan 2024 11:00:00 Z2024-03-27T10:51:41Z{724354CB-C752-402A-8A66-50AC98E1A501}https://www.home.saxo/content/articles/commodities/data-dependent-precious-metals-continue-their-bumpy-ride-16012024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal ReserveMiningStagflationThought Starterscommodity-platinumFocus InflationData dependent precious metals continue their bumpy ride<div class="article-excerpt">The precious metals sector trades down on the month with gold and silver both stuck in ranges while speculation continues about the timing, pace and depth of future US and EU rate cuts.</div><div class="article-rte"><div class="rte--output"><div> <p paraid="1273155458" paraeid="{ca0b8edb-b503-458d-951d-fdae4b306937}{121}"><span data-contrast="auto">The precious metals sector trades down on the month with gold and silver both stuck in ranges while speculation continues about the timing, pace and depth of future US and EU rate cuts. Until the first cut is being delivered the market may at times run ahead of itself, in the process building up rate cut expectations to levels that leave prices vulnerable to a correction. Recently a stronger-than-expected US inflation print for December helped send gold lower, but not through key support in the $2010 area, only to rise following a weaker than expected PPI print.<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="1689804944" paraeid="{ca0b8edb-b503-458d-951d-fdae4b306937}{153}"><span data-contrast="auto">Some components in the PPI report being used in the PCE compilation, the Fed&rsquo;s preferred inflation measure due next week, showed weakness, potentially lowering the 3-month and 6-month annualized rates of PCE inflation below the Fed&rsquo;s 2% target. Together with simmering geopolitical tensions the data supported a strong push higher on short covering and fresh technical buying, before the yellow metal once again got rejected around $2060. However, as long the price continues to find support near $2010, gold will likely remain range bound, while a break above $2060 could target the late December high at $2088.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <p><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <div> <div> <h3><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="16olh_gold0" src="https://www.home.saxo/-/media/content-hub/images/2024/january/16olh_gold0.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><span data-contrast="auto"><a href="https://www.saxotrader.com/sim/instant-demo/InstantDemo-EN-GL/page/product/FxSpot/8177?activeTab=overview&amp;cmpid=copy_link_platform_sharing"></a></span> <div> <div> <p><span data-contrast="auto"><span data-contrast="auto">From a trading perspective, the short-term direction of gold and silver will continue to be dictated by incoming economic data and their impact on the mentioned timing and pace of future rate cuts. A situation made clear on Monday when ECB&rsquo;s Holzmann pushed back against the market&rsquo;s current pricing of six quarter percent cuts by the European Central Bank this year, giving lingering inflation and geopolitical risks.&nbsp;However, by the time his comments were contradicted by Villeroy, another ECB member, who said that cuts are very likely in 2024 but the timing remains uncertain, the technical damage had already been done resulting in selling from recently established longs. </span><span data-ccp-props="{'134233117':false,'134233118':false,'201341983':0,'335551550':1,'335551620':1,'335559685':0,'335559737':0,'335559738':0,'335559739':160,'335559740':276}"></span><span data-ccp-props="{'134233117':false,'134233118':false,'201341983':0,'335551550':1,'335551620':1,'335559685':0,'335559737':0,'335559738':0,'335559739':160,'335559740':276}"></span></span></p> <h3 paraid="1033937941" paraeid="{40b2c94f-ca78-4b98-88a6-b55cc697fffa}{234}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div> </div> <div> <p paraid="1425391661" paraeid="{7ae875e5-8831-4f3d-9c4d-e0eec23f9053}{112}"><span data-ccp-props="{'134233117':false,'134233118':false,'335559738':0,'335559739':0}"></span></p> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></div></div><div class="article-image"><img alt="16olh_gold1" src="https://www.home.saxo/-/media/content-hub/images/2024/january/16olh_gold1.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <p paraid="497314738" paraeid="{8b549661-a16b-42f6-95d4-4ec8856a909b}{2}"><span data-contrast="auto">As per our monitor above, we continue to watch movements in the dollar, 10-year US real yields, short-term interest rates futures as well as trade flows in ETFs and futures. Today&rsquo;s weakness has been driven by the dollar, which following eight weeks of selling from speculators in the futures market has been left exposed to short-covering, a process that gathered momentum today amid increased geopolitical tensions and traders once again dialing back on&nbsp;the prospect of a March FOMC rate cut while hanging onto expectations the Fed will deliver at least six quarter percent cuts this year.&nbsp;<br /> </span><span data-ccp-props="{'134233117':false,'134233118':false,'201341983':0,'335551550':1,'335551620':1,'335559685':0,'335559737':0,'335559738':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="806115148" paraeid="{8b549661-a16b-42f6-95d4-4ec8856a909b}{40}"><span data-contrast="auto">One of gold&rsquo;s biggest achilleas heals remain the lack of interest from investors through ETFs, where total holdings continue to drop, falling to a near four-year low, and until we see the funding cost of holding a gold position beginning to come down, the prospect of a price supportive pickup in demand seems limited. Speculators in the futures market, meanwhile, will continue to add volatility to the market as they buy in the strength, only to reduce their exposure as prices weaken.&nbsp;<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="286737237" paraeid="{8b549661-a16b-42f6-95d4-4ec8856a909b}{70}"><span data-contrast="auto">Silver continues to trade near a ten-month low relative to gold on a combination of a weak start to the year for industrial metals amid global economic growth concerns and lack of strong stimulus initiatives in China. The upside is also being obstructed by a nearby wall of resistance in XAGUSD around $23.60 as it attracts profit taking from short-term focused swing traders, while support at $22.50 looks equally strong, leaving the white metal range bound for now. Speculators in the futures market meanwhile maintain an overall weak belief in higher prices with the latest COT report covering the week to January 9 showing a 50% drop in the net long to just 8k contracts, a two-month low, and below the 12k average position held this past year.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div></div></div><div class="article-image"><img alt="16olh_gold2" src="https://www.home.saxo/-/media/content-hub/images/2024/january/16olh_gold2.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><span data-contrast="auto">Last week, Saxo&rsquo;s strategy team released their </span><a href="https://www.home.saxo/insights/news-and-research/thought-leadership/quarterly-outlook" target="_blank" rel="noopener noreferrer"><span data-contrast="none">Q1 2024 outlook</span></a><span data-contrast="auto"> titled &ldquo;What happened to the future?&rdquo;. In the commodities section, we outlined the reasons why we believe 2024 could become the &ldquo;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024" target="_blank" rel="noopener noreferrer"><span data-contrast="none">Year of the metals</span></a><span data-contrast="auto">&rdquo; with focus on gold, silver, platinum and copper. In precious metals, we believe the prospect for lower real yields and lower funding costs as central bank rate cuts will drive a revival in demand from interest rate-sensitive investors. Adding to these developments a fragmented world supporting continued demand from central banks and haven demand from others, the potential for a fresh record remains on the cards.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></div></div><div class="article-additional-rte"><div class="rte--output"><hr /> <p><span>Commodity articles:</span></p> <p>12 Jan 2024:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024">Commodity weekly: geopolitical risks lift crude and gold prices</a><br /> 9 Jan 2024:&nbsp;<a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024">Q1 Outlook &ndash; Year of the metals</a><br /> 5 Jan 2024:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024">Commodity weekly: Bumpy start to 2024</a><br /> 4 Jan 2024:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024">What to watch in crude oil as 2024 gets underway</a><br /> 4 Jan 2024:&nbsp;<a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024">Podcast: Crude oil and gold in focus as a new year begins</a><br /> 21 Dec 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023">Weather, rates and unrest paint muddy picture for commodities in 2023</a><br /> 19 Dec 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023">Crude and gas pop on Red Sea Disruption Risks</a><br /> 14 Dec 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023">Fed's dovish tilt adds fresh fuel to precious metals</a><br /> 13 Dec 2023:&nbsp;<a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023">Video - Why gold may enjoy a Santa rally for the 7th year in a row</a><br /> 12 Dec 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/uranium-12122023">Video - Investing in Uranium</a><br /> 1 Dec 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023">Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</a><br /> 30 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023">Precious metals take top spot for a second month</a><br /> 23 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023">A nervous crude oil market awaits OPEC's next move</a><br /> 23 Nov 2023: Podcast:&nbsp;<a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023">Will Santa deliver another golden gift</a><br /> 22 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023">Will gold and silver see another Santa rally</a>?<br /> 17 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023">Commodity weekly: Crude overshoots; silver the comeback kid</a><br /> 16 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/podcast/podcast-16-nov-2023---commodities-16112023">Podcast: Silver comeback, watch OPEC as crude oil slides lower</a><br /> 16 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/crude-oil-weakness-adds-focus-to-upcoming-opec-meeting-16112023">Crude oil weakness adds focus to upcoming OPEC meeting</a><br /> 15 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/soft-cpi-lifts-gold-and-beaten-down-silver-and-platinum-15112023">Soft CPI lifts gold and beaten down silver and platinum</a><br /> 12 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/copper-update---21-november-2023-21112023">Copper supported by green transformation demand and peak rate speculation</a>&nbsp;<br /> 10 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---10-november-2023-10112023">Commodity weekly: Crude oil risks overshooting the downside</a></p> <p><span>Previous "Commitment of Traders" articles</span><span><br /> <br /> </span>15 Jan 2024:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024">COT: Grains sector slump continues; Mideast risks lift crude demand</a><br /> 8 Jan 2024<span>:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024">COT: Weakest commodities conviction since 2015</a><span><br /> </span>18 Dec 2023:<a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023">COT: Crude long hits 12-year low ahead of FOMC bounce</a><br /> 11 Dec 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023">COT: An underowned commodity sector raising risk of an upside surprise in 2024</a><br /> 4 Dec 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023">COT: Speculators add further fuel to gold rally</a><br /> 20 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023">COT: Crude selling slows, grains in demand</a><br /> 14 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023">COT: Crude long slumps; agriculture sector in demand</a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Mining</span> <span>Stagflation</span> <a href="https://www.home.saxo/insights/news-and-research/thought-starters">Thought Starters</a> <span>Platinum</span> <span>Focus Inflation</span></div>Tue, 16 Jan 2024 12:00:00 Z2024-03-27T10:51:42Z{3E12308B-B131-4FE5-AADF-B4202DB63B56}https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---15-jan-2024-15012024Ole Hansenproduct-commoditiesCOT Commoditiescommodity-crude oilcommodity-natural gascommodity-goldcommodity-silvercommodity-coppercommodity-platinumcommodity-corncommodity-sugarcommodity-coffeecommodity-gasolinecommodity-palladiumcommodity-wheatcommodity-cocoacommodity-cottoncommodity-cattlesector-gics-1010product-forexCOT FXforex-eurusdforex-usdjpyforex-audusdforex-usdcadforex-usdchfforex-gbpusdforex-nzdusdsubject-is/fin.stpbondBonds Inspirationproduct-bondsproduct-forexEn hurtig tankeCOT: Grains sector slump continue; Mideast risks lifts crude demand<div class="article-excerpt">Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to last Tuesday, January 9</div><div class="article-rte"><div class="rte--output"><em>Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities while in forex we use the broader measure called non-commercial.</em></div></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>What is the Commitments of Traders report?</span></h3> <br /> <p>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.</p> <p>Commodities: Producer/Merchant/Processor/User, Swap dealers,&nbsp;<span>Managed Money</span>&nbsp;and other<br /> Financials: Dealer/Intermediary; Asset Manager/Institutional;&nbsp;<span>Leveraged Funds</span>&nbsp;and other<br /> Forex: A broad breakdown between commercial and&nbsp;<span>non-commercial</span>&nbsp;(speculators)</p> <p>The main reasons why we focus primarily on the behavior of speculators, such as hedge funds and trend-following CTA's are:</p> <ul> <li>They are likely to have&nbsp;<span>tight stops</span>&nbsp;and&nbsp;<span>no underlying exposure</span>&nbsp;that is being hedged</li> <li>This makes them&nbsp;<span>most reactive to changes</span>&nbsp;in fundamental or technical price developments</li> <li>It provides views about&nbsp;<span>major trends</span>&nbsp;but also helps to decipher when a&nbsp;<span>reversal</span>&nbsp;is looming</li> </ul> <p>Do note that&nbsp;<span >this group tends to <strong>anticipate, accelerate, and amplify</strong> price changes that have been set in motion by <strong>fundamentals</strong>. Being followers of momentum, this strategy often sees this group of traders buy into strength and sell into weakness, meaning that they are often found holding the biggest long near the peak of a cycle or the biggest short position ahead of a through in the market.</span></p></div></div><div class="article-additional-rte"><div class="rte--output"><span></span> <div> <span></span> <span></span> <div> <span></span> <div> <div> <div> <div> <div> <div> <div> <span></span> <div> <div> <span data-contrast="none"></span><span></span> <div> <span data-contrast="none"></span> <div> <span data-contrast="none"></span> <div> <span></span> <span>This summary highlights futures positions and changes made by hedge funds across commodities</span><span> and </span><span>forex</span><span> </span><span>in the</span><span> </span><span>week to </span><span>last </span><span>Tuesday</span><span>, </span><span>January </span><span>9</span><span>. </span><span>A </span><span>reporting </span><span>week that saw the market take a rain check on the </span><span>timing, </span><span>pace and depth of </span><span>incoming</span><span> </span><span>US</span><span> rate cut</span><span>, </span><span>before US </span><span>CPI</span><span> and </span><span>PPI</span><span> prints towards the end of last week reignited </span><span>the prospect of a rate cut being announced </span><span>already </span><span>at the March meeting. Returning to the reporting week, we saw bond yields trade a tad higher, stock markets </span><span>consolidating</span><span> recent strong gains while the </span><span>dollar </span><span>was firmer despite continued selling from speculators</span><span>. In commodities the geo-political risk premium in crude received a fresh boost on Mideast tensions, </span>profit taking hit the metal sector, including gold and copper, while the agriculture sector continued to see strong selling interest.&nbsp;<br /> <br /> <h3 class="article-heading--3">Commodities</h3> <br /> <span data-contrast="auto" >The Bloomberg Commodity index which tracks a basket of 24 major futures markets split near evenly between energy, metals and agriculture, traded flat on the week with gains in energy (+4.6%), led by crude oil, being offset by weakness across precious (-2.3%) and industrial (-3.3%) metals, and not least the grains sector which slumped 1% to a fresh three-year low.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}" ></span> <p paraid="326048893" paraeid="{9b65b38c-d31b-49a2-8806-b376d37927f9}{157}"><span data-contrast="auto">Overall developments that saw net long futures position held hedge funds and CTA&rsquo;s extend their recent slump to an October 2019 low at 251k contracts, representing a nominal value of $49 billion, and the weakest position held at the start of any year since 2015. Selling has in recent months primarily been concentrated in grains, resulting in the biggest net short position since May 2019. <br /> <br /> Overall, the week saw net selling in 14 out of the 24 major futures contracts tracked in this, in nominal terms led by gold (-$6.3b), copper (-$2.5b) and the soybeans complex (-$2.3b) while buying was almost exclusively concentrated in crude oil ($4.6b) and natural gas (+1.2b).</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}" ></span></div> </div> <p paraid="1396398248" paraeid="{a9890f65-bd09-43ce-b941-e232248f0c46}{133}"><span data-contrast="auto"> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p><span> </span></p> <p><span> </span></p> </div> </div> </div> <div> <span data-ccp-props="{'201341983':0,'335559740':259}" ></span></div> </div> </div> <div> <p paraid="739880928" paraeid="{6472d595-91b7-4440-89e9-890d4acd9c8e}{166}"><span data-contrast="none"> </span></p> </div> <p><span> </span></p> </div> <div> <p paraid="1053527918" paraeid="{f64664da-5092-46b8-866f-464e46bdf07a}{149}"><span data-ccp-props="{}"></span></p> </div> </div> </div> </div></div></div><div class="article-image"><img alt="15olh_cot1" src="https://www.home.saxo/-/media/content-hub/images/2024/january/15olh_cot1.png"/></div><div class="article-additional-rte"><div class="rte--output"><p><span><span data-contrast="auto">As we have highlighted in recent weeks, these developments highlight an increasingly under-owned asset class which struggled last year amid growth worries in China and the wider world, and a sharp rise in funding costs leading industries to reduce excess inventories. It also highlights a sector which, given the right circumstances, may rebound in 2024 once the technical and/or fundamental outlook becomes more supportive, thereby leading to fresh buying and short covering. Drivers that may trigger such a change could be rate cuts lowering the funding costs and with that the inherent contango leading to industry restocking of inventories, OPEC maintaining a tight control of the supply of crude oil, El Nin&otilde; developments creating another challenging year for key agriculture products, and not least signs of tightness across key commodities that will help offset the risk of an economic slowdown across key economies.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span> </span></p></div></div><div class="article-image"><img alt="15olh_cot2" src="https://www.home.saxo/-/media/content-hub/images/2024/january/15olh_cot2.png"/></div><div class="article-image"><img alt="15olh_cot3" src="https://www.home.saxo/-/media/content-hub/images/2024/january/15olh_cot3.png"/></div><div class="rte--output">The crude oil net long jumped 61k lots to 320k, the most in a year, driven by short covering in WTI (+22k) and fresh longs in Brent (+30k). Products sold amid rising stock levels while the natural gas net flipped back to a small long amid cold-weather price strength. </div><br/><div class="article-image"><img alt="15olh_cot4" src="https://www.home.saxo/-/media/content-hub/images/2024/january/15olh_cot4.png"/></div><div class="rte--output">Metals: Speculators cut their gold long by 23% as prices reversed lower to but not through key support in the $2010-15 area. The silver long was halved while a 27k lots sale in copper flipped the net back to a 17k lots short </div><br/><div class="article-image"><img alt="15olh_cot5" src="https://www.home.saxo/-/media/content-hub/images/2024/january/15olh_cot5.png"/></div><div class="rte--output">Grains: Funds sold 79k lots of grains as the BCOM grains index hit a 3-yr low and ahead of Friday's (bearish) WASDE report. The corn short reached 231k lots, the soybeans short jumped to 31k, both biggest short bets since COVID struck in early 2020, while the wheat short held steady. Overall, the net short across the sectors six contracts reached a May 2019 high. </div><br/><div class="article-image"><img alt="15olh_cot6" src="https://www.home.saxo/-/media/content-hub/images/2024/january/15olh_cot6.png"/></div><div class="rte--output">In softs, the main changes were a drop in the sugar long to a 14-month low and an increase in the Arabica coffee long to a 15-month high.</div><br/><div class="article-image"><img alt="15olh_cot7" src="https://www.home.saxo/-/media/content-hub/images/2024/january/15olh_cot7.png"/></div><div class="rte--output">In forex, dollar selling extended to an eight week of dollar lifting the gross short against eight IMM futures and DXY to an August high at $11.8b. Driven by demand for GBP (+5.5k lots & $0.4b eq.), AUD (+10.6k & $0.7b), and not least CAD (+13.8k & $1b). Net long positions held in EUR, GBP and MXN.</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><span>5 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024">Commodity weekly: Bumpy start to 2024</a><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> 21 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a><span><br /> 19 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a><span><br /> 14 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a><span><br /> 13 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a><span><br /> 12 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a><span><br /> 1 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a><span><br /> 30 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a><span><br /> 23 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a><span><br /> 22 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a><span>?<br /> 17 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a><span><br /> 16 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-16-nov-2023---commodities-16112023"><strong><span>Podcast: Silver comeback, watch OPEC as crude oil slides lower</span></strong></a><span><br /> 16 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-weakness-adds-focus-to-upcoming-opec-meeting-16112023"><strong><span>Crude oil weakness adds focus to upcoming OPEC meeting</span></strong></a><span><br /> 15 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/soft-cpi-lifts-gold-and-beaten-down-silver-and-platinum-15112023"><strong><span>Soft CPI lifts gold and beaten down silver and platinum</span></strong></a><span><br /> 12 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/copper-update---21-november-2023-21112023"><strong><span>Copper supported by green transformation demand and peak rate speculation</span></strong></a><span>&nbsp;<br /> 10 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---10-november-2023-10112023"><strong><span>Commodity weekly: Crude oil risks overshooting the downside</span></strong></a></p> <p><strong><span>Previous "Commitment of Traders" articles</span></strong><strong><span><br /> <br /> </span></strong><span>18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An underowned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a><span><br /> 20 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023"><strong><span>COT: Crude selling slows, grains in demand</span></strong></a><span><br /> 14 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023"><strong><span>COT: Crude long slumps; agriculture sector in demand</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>COT Commodities</span> <span>Crude Oil</span> <span>Natural Gas</span> <span>Gold</span> <span>Silver</span> <span>Copper</span> <span>Platinum</span> <span>Corn</span> <span>Sugar</span> <span>Coffee</span> <span>Gasoline</span> <span>Palladium</span> <span>Wheat</span> <span>Cocoa</span> <span>Cotton</span> <span>Cattle</span> <span>Energy (Sector)</span> <span>Forex</span> <span>COT FX</span> <span>EURUSD</span> <span>USDJPY</span> <span>AUDUSD</span> <span>USDCAD</span> <span>USDCHF</span> <span>GBPUSD</span> <span>NZDUSD</span> <span>Government Bonds</span> <span>Bonds nspiration</span> <a href="https://www.home.saxo/insights/news-and-research/bonds">Bonds</a> <a href="https://www.home.saxo/insights/news-and-research/forex">Forex</a> <span>En hurtig tanke</span></div>Mon, 15 Jan 2024 09:30:00 Z2024-03-27T10:51:44Z{5B6C36F1-FB06-44A2-8E0B-E4048582BEF2}https://www.home.saxo/content/articles/commodities/commodity-weekly---12-jan-2024-12012024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal Reservecommodity-gas oilcommodity-crude oilcommodity-heating oilsector-Oil and GasOilcommodity-copperAgricultureplace-lc/cnHighlighted articlescommodity-wheatIron Orecommodity-natural gasCommodity weekly: Geopolitical risks lift crude and gold prices<div class="article-excerpt">The commodities sector has reverted to a small gain during the first two weeks of trading with strong gains in energy, and to a lesser extent softs and precious metals being offset by losses across industrial metals and the grains sector.</div><div class="article-rte"><div class="rte--output"><p><span>The commodities sector has reverted to a small gain during the first two weeks of trading with strong gains in energy, and to a lesser extent softs and precious metals being offset by losses across industrial metals and the grains sector. The focus in the market remains firmly on the macroeconomic landscape where concerns about an economic slowdown, not least in China, the world&rsquo;s top consumer of raw materials, are being offset by expectations that the People&rsquo;s Bank of China (PBoC) may lower rates soon. In addition, several major central banks &ndash; led by the Federal Reserve &ndash; remain on track to embark on an aggressive rate cut cycle sometime in the coming months.</span></p> <p><span>In addition, geopolitical risks associated with Houthi attacks on ships in the Red Sea continue to attract a great deal of attention, in the process diverting the focus in energy markets away from a current weak demand outlook. During the past couple of weeks, Brent and WTI crude oil futures have gyrated within narrow ranges, before breaking higher on Friday after the US and UK launched airstrikes against Houthi rebels in Yemen, in the process driving the geopolitical risk premium even higher. </span></p> <p><span> </span></p> <p><span> </span></p></div></div><div class="article-image"><img alt="12olh_wcu1" src="https://www.home.saxo/-/media/content-hub/images/2024/january/12olh_wcu1.png"/></div><div class="article-additional-rte"><div class="rte--output"><p><span> </span></p> <div> <h3 class="article-heading--3"><span>Crude oil rises on a not yet realised supply threat</span></h3> <p><span>The crude oil market, in a downtrend since October, began the year consolidating within a narrow range - in Brent between $75 and $79 - as the tug-of-war between demand and supply concerns continued to create choppy but overall directionless price action. This stalemate, however, showed signs of changing with Brent making attempts to break above $80 and WTI above $75 after the US and UK launched airstrikes against Houthi rebels in Yemen, in retaliation for numerous attacks on ships in the Red Sea which have impacted normal flows of energy and goods north through the Suez Canal. In turn, the cost of shipping a container from China to Rotterdam since early December has surged from around $1400 to above $4500 dollars as the rerouting of ships leads to longer journey times and delays. An example of this is Tesla, which recently announced it would halt production for two weeks at its giga factory in Berlin due to lack of components, initially reducing production by 5000 to 7000 cars. </span></p> <p><span>However, while supply disruptions are still an unrealised threat, the physical market is showing signs of actual weakness, to a certain extent reducing the geopolitical risk impact. An example of weaker demand fundamentals was signalled by Saudi Aramco after it lowered the premium it charged Asian customers for deliveries in February to the lowest level since November 2021, following a weakening of spot differentials for Middle Eastern crudes due to weak Chinese demand and rising supply from non-OPEC producers. </span></p> <p><span>Having seen both Brent and WTI breaking the downtrends in place since late September, both crude benchmarks may see additional momentum buying, driving up the risk premium to levels that looks unsustainable unless a real disruption occurs to supplies from key Middle East producers. Potentially adding fuel to the rally are once again speculators &ndash; such as hedge funds and CTAs &ndash; who started 2024 with the smallest WTI and Brent net long in recent memory, not least due to the biggest gross short since 2016 have been supporting the rally through short covering. In the short-term, as per the chart below, the next key level of resistance in Brent can be found around $82, a break above which could trigger an additional technical reaction towards $85. </span></p> <p><span>Overall, we see Brent crude oil remain rangebound around $80 per barrel during the first quarter with the very weak positioning, OPEC+ production restraint, and incoming rate cuts potentially leaving the risk/reward skewed slightly to the upside. The biggest downside risk is a disunited OPEC+ leading to a collapse in the current agreement to keep production down, and the upside from a major geopolitical event disrupting the flow of crude oil and gas from the Middle East.</span></p> </div></div></div><div class="article-image"><img alt="12olh_wcu3" src="https://www.home.saxo/-/media/content-hub/images/2024/january/12olh_wcu3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>Gold higher on haven demand with stronger US inflation print being ignored</span></h3> <p><strong><span> </span></strong></p> <p><span>Hours after a stronger-than-expected US inflation print for December helped send gold prices lower, but not through key support in the $2010 area, bullion prices rose strongly after the US-led airstrikes on Houthis triggered a fresh round of safe haven demand. In addition, the market was supported by movements in bond yields and short-term interest rates which concluded that firmer inflation would not derail the prospect of a precious metals-supportive cut in interest rates, perhaps as soon as March. </span></p> <p><span>This past week, Saxo&rsquo;s strategy team released their </span><span><a href="https://www.home.saxo/insights/news-and-research/thought-leadership/quarterly-outlook"><span>Q1 2024 outlook</span></a></span><span> titled &ldquo;What happened to the future?&rdquo;. In the commodities section, we outlined the reasons why we believe 2024 could become the &ldquo;</span><span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><span>Year of the metals</span></a></span><span>&rdquo; with focus on gold, silver, platinum and copper. In precious metals, we believe the prospect for lower real yields and lower funding costs as central bank rate cuts will drive a revival in demand from interest rate-sensitive investors. Adding to these developments a fragmented world supporting continued demand from central banks and haven demand from others, the potential for a fresh record remains on the cards. </span></p> <p><span>In the short term, gold's ability to hold above key support in the $2015 area, thereby preventing additional long liquidation from funds which started the year with an elevated long position, has given bulls renewed belief in higher prices with focus now on resistance at $2088, the December 28 high.&nbsp;</span><strong ></strong></p> <h3 class="article-heading--3"><span>Industrial metals look to China for stimulus support&nbsp;</span></h3> <p><span>Industrial metals have posted a weak start to the year as the outlook for global manufacturing and construction remains under scrutiny, for now more than offsetting calls for stronger stimulus measures in China, and the potential positive impact of restocking once an expected series of rate cuts from major central banks begin later this year. The Bloomberg Industrial Metal index trades down 3.6% on the month with losses being led by aluminum which jumped 12% last month on tight supply worries following utilization cuts at refiners in China and after a deadly explosion in Guinea impacted shipments and transportation of bauxite, the key raw material in alumina production. This month so far, the market has given back around half of those gains amid an overdone rally and a flood of Russian aluminum being delivered to the London Metal Exchange after the UK government-imposed sanctions limited the ability of UK companies to trade physical Russian metals. </span></p> <p><span>Copper prices, meanwhile, bounced back after eight straight losing days supported by China stimulus bets and the news that Chile scaled back its production growth forecast for this year and next amid declining ore quality, water restrictions and increased scrutiny of new permits. The combination of supply worries and the prospect of an increased chance the PBoC may cut key interest rates soon will, together with a strong push towards electrification, not least in China, continue to provide support in the short term. However, to see a sustained rally towards a fresh record high, the market will need answers to the questions about the timing of and depth of future US rate cuts. Only then may we see renewed restocking by companies that offloaded metals last year amid the rising cost of financing their stockpiles.</span></p> <h3><span data-contrast="auto"><br /> <br /> </span></h3></div></div><div class="article-image"><img alt="12olh_wcu2" src="https://www.home.saxo/-/media/content-hub/images/2024/january/12olh_wcu2.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><div> <h3 class="article-heading--3"><span>Under pressure grains sector hits fresh four-year low</span></h3> <p><span>The grains sector remains under pressure with the Bloomberg Grains index hitting a fresh four-year low. The sector has been under pressure for more than a year now amid ample supply following a robust 2023/24 Northern hemisphere production season, and after recent rains in Brazil lifted the prospect for soybeans production. On Friday, the market was looking to key reports from the US government on supply and demand, US and global stock levels as well as winter wheat acreage update, to shed further light on the current state of the sector. Ahead of the US and European planting season, the market will continue to focus on weather developments in South America and the dollar, given its impact on the competitiveness of US exports relative to crops sourced from other regions.&nbsp; </span></p> <p><span>According to the latest update from US CFTC covering </span><span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><span>speculators positioning</span></a></span><span> in the futures market, the grains and soy net short (Six contracts) reached a 3-1/2-year high in the week to January 2. In the last ten-years speculators have only held a bigger end of year short positions on two occasions, the latest being 2017. Combining this with a recent increase in open interest, indicative of a substantial short builds in these contracts. Most of these short positions have been initiated in a narrow price range and are at a significant risk of getting caught offside should the technical and/or fundamental outlook suddenly change, or the above-mentioned government reports spring a bullish surprise. </span></p> </div></div></div><div class="article-image"><img alt="12olh_wcu4" src="https://www.home.saxo/-/media/content-hub/images/2024/january/12olh_wcu4.png"/></div><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>10 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/crude-oil-update-10012024">Crude oil stuck as focus alternates</a><br /> 9 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024"><strong><span>Q1 Outlook &ndash; Year of the metals</span></strong></a><span><br /> 5 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024"><strong><span>Commodity weekly: Bumpy start to 2024</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> 21 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a><span><br /> 19 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a><span><br /> 14 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a><span><br /> 13 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a><span><br /> 12 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a><span><br /> 1 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a><span><br /> 30 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a><span><br /> 23 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a><span><br /> 22 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a><span>?<br /> 17 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a><span><br /> 16 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-16-nov-2023---commodities-16112023"><strong><span>Podcast: Silver comeback, watch OPEC as crude oil slides lower</span></strong></a><span><br /> 16 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-weakness-adds-focus-to-upcoming-opec-meeting-16112023"><strong><span>Crude oil weakness adds focus to upcoming OPEC meeting</span></strong></a><span><br /> 15 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/soft-cpi-lifts-gold-and-beaten-down-silver-and-platinum-15112023"><strong><span>Soft CPI lifts gold and beaten down silver and platinum</span></strong></a><span><br /> 12 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/copper-update---21-november-2023-21112023"><strong><span>Copper supported by green transformation demand and peak rate speculation</span></strong></a><span>&nbsp;<br /> 10 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---10-november-2023-10112023"><strong><span>Commodity weekly: Crude oil risks overshooting the downside</span></strong></a></p> <p><strong><span>Previous "Commitment of Traders" articles</span></strong><strong><span><br /> <strong><span></span></strong><br /> </span></strong><span>8 Jan 2024<strong>:&nbsp;</strong></span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024"><strong><span>COT: Weakest commodities conviction since 2015</span></strong></a><strong><span><br /> </span></strong><span>18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An underowned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a><span><br /> 20 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023"><strong><span>COT: Crude selling slows, grains in demand</span></strong></a><span><br /> 14 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023"><strong><span>COT: Crude long slumps; agriculture sector in demand</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Gas Oil</span> <span>Crude Oil</span> <span>Heating Oil</span> <span>Oil and Gas</span> <span>Oil</span> <span>Copper</span> <span>Agriculture</span> <span>China</span> <span>Highlighted articles</span> <span>Wheat</span> <span>Iron Ore</span> <span>Natural Gas</span></div>Fri, 12 Jan 2024 02:30:00 Z2024-03-27T10:51:42Z{456D1DFB-0C16-4FB9-BF01-CCF18865D29C}https://www.home.saxo/content/articles/commodities/crude-oil-update-10012024Ole Hansenproduct-commoditiesInflationFederal Reservecommodity-crude oilcommodity-gas oilcommodity-heating oilOilsector-Oil and Gasplace-lc/cnCrude oil stuck as focus alternates between demand and supply concerns <div class="article-excerpt">The crude oil market, in a downtrend since October, is showing signs of settling into a relatively narrow range - in Brent between $75 and $80 - as the tug-of-war between demand and supply concerns continue to create choppy but overall directionless price action.</div><div class="article-rte"><div class="rte--output"><span></span> <h3 class="article-heading--3">Key points</h3> <ul> <li><span>Demand and supply concerns continue to create choppy but overall directionless price action</span></li> <li>Speculators start the year with the weakest belief in higher crude prices in recent momory</li> <li><span></span><span>Rangebound price action seen during Q1 with an upside break the biggest risk</span></li> </ul> &nbsp; <div> <p paraid="1185622798" paraeid="{30b58192-8181-4c11-b199-b74d0ac25da8}{127}"><span data-contrast="auto">The crude oil market, in a downtrend since October, is showing signs of settling into a relatively narrow range - in Brent between $75 and $80 - as the tug-of-war between demand and supply concerns continue to create choppy but overall directionless price action. It is also worth noting that the first few weeks of new trading year often produces this kind of price action with traders trying to jump onto low conviction moves for fear of missing out should they develop to something bigger.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1402715847" paraeid="{30b58192-8181-4c11-b199-b74d0ac25da8}{173}"><span data-contrast="auto">The first week of trading saw several failed rallies in response to concerns about Middle East stability as Houthis continue to attack ships in the Red Sea. However, while supply disruptions are still an unrealised threat, the physical market is showing signs of actual weakness, basically reducing the geopolitical risk impact. Markets fell on Monday after Saudi Aramco lowered the premium it charges customers above regional benchmark prices by $2 per barrel to just $1.5 per barrel, the lowest level since November 2021, and it follows a weakening of spot differentials for Middle Eastern crudes due to weak China demand and rising supply from non-OPEC producers.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="254137332" paraeid="{30b58192-8181-4c11-b199-b74d0ac25da8}{249}"><span data-contrast="auto">The EIA in their latest </span><a href="https://www.eia.gov/outlooks/steo/report/index.php" target="_blank" rel="noopener noreferrer"><span data-contrast="none">Short-term energy outlook</span></a><span data-contrast="auto">, released on January 9, wrote the following about global oil production and consumption: &ldquo;Global liquid fuels production increases by 0.6 million b/d in 2024, down from an increase of 1.7 million b/d in 2023. Global liquid fuels production growth in our forecast slows in 2024 because of both OPEC+ production cuts and slowing non-OPEC growth. OPEC+ crude oil production declines by 0.6 million b/d in our forecast for 2024, which is offset by 1.2 million b/d of production growth outside of the group. Growth is lower in 2024 compared with 2023 in large part because of slowing supply growth from the United States, Canada, and Brazil. Supply growth in Guyana accelerates this year in our forecast.&rdquo;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="10olh_oil1" src="https://www.home.saxo/-/media/content-hub/images/2024/january/10olh_oil1.png"/></div><div class="rte--output">Source: EIA</div><br/><div class="article-additional-rte"><div class="rte--output"><div> <div> <p paraid="1927712877" paraeid="{f93510c2-78f8-4a81-b384-c3dae15a3a5b}{30}"><span data-contrast="auto">The 25-dollar slump in global oil prices since the early October high above $95 in Brent helped drive a significant reduction in bullish bets held by hedge funds and CTAs in the futures market from 560,000 contracts (560 million barrels) to a December low at 171,000 contracts, before Red Sea worries helped drive a recovery to 259,000 on January 2. As per the chart below, we find that speculators have not in recent memory started a year with such a low belief in higher prices with the weak positioning primarily being driven by an elevated gross short at 204,611 contracts, the highest since 2016.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="873293446" paraeid="{f93510c2-78f8-4a81-b384-c3dae15a3a5b}{76}"><span data-contrast="auto">Speculators will continue to play a key role in setting highs and lows in the market. These often momentum following trading strategies tends to anticipate, accelerate, and amplify price changes that have been set in motion by fundamentals. However, being followers of momentum, this strategy often sees this group of traders buy into strength and sell into weakness, meaning that they are often found holding the biggest long near the peak of a cycle or the biggest short position ahead of a through in the market.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="516664849" paraeid="{f93510c2-78f8-4a81-b384-c3dae15a3a5b}{92}"><span data-contrast="auto">The low positioning</span><span data-contrast="auto"> highlights an energy sector which, given the right circumstances, may rebound in 2024 once the technical and/or fundamental outlook becomes more supportive, thereby leading to fresh buying and short covering. In the short-term however the fundamental outlook does not look strong enough to trigger such a recovery.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div></div></div><div class="article-image"><img alt="10olh_oil2" src="https://www.home.saxo/-/media/content-hub/images/2024/january/10olh_oil2.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <p paraid="1051626906" paraeid="{f36d743b-67df-4b22-a4eb-32d92bd6fed7}{189}"><span data-contrast="auto"><span data-contrast="none">Later today the EIA will release its weekly crude and fuel stock report&nbsp;and surveys put expectations in line with seasonal developments with&nbsp;falling&nbsp;crude oil stocks amid strong exports and robust refinery demand&nbsp;driving a rise in fuel stocks, not least after the latest report showed the biggest one-week combined increase in gasoline and distallate stocks in data going back to 1990.&nbsp;As per usual, the market will also be watching implied demand after the latest report showed diesel demand falling to the lowest level since 1999 while gasoline demand tumbled to lowest in a year.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div></div></div><div class="article-image"><img alt="10olh_oil4" src="https://www.home.saxo/-/media/content-hub/images/2024/january/10olh_oil4.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <div> <p paraid="213809690" paraeid="{f93510c2-78f8-4a81-b384-c3dae15a3a5b}{138}"><span data-contrast="auto">We see an increased likelihood of crude oil staying rangebound in the coming months with no single trigger being strong enough to change the dynamics of a market that has divided its focus between growth worries, not least in China and the USA, as well as rising non-OPEC+ production on one hand and OPEC+ cuts and geopolitical risks on the other. On top of this we may see risk appetite ebb and flow in line with changes in the expected pace of US rate cuts.&nbsp;<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="380990080" paraeid="{f93510c2-78f8-4a81-b384-c3dae15a3a5b}{144}"><span data-contrast="auto">With that in mind, we see Brent crude oil remain rangebound around $80 per barrel during the first quarter with the very weak positioning, OPEC+ production restraint, and incoming rate cuts potentially leaving the risk/reward skewed slightly to the upside. The biggest downside risk being a disunited OPEC+ leading to a collapse in the current agreement to keep production down, and the upside from a major geopolitical event disrupting the flow of crude oil and gas from the Middle East.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <h3><span data-contrast="auto"> <br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></h3> </div></div></div><div class="article-image"><img alt="10olh_oil3" src="https://www.home.saxo/-/media/content-hub/images/2024/january/10olh_oil3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>9 Jan 2024: <a href="https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024">Q1 Outlook &ndash; Year of the metals</a><br /> 5 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024">Commodity weekly: Bumpy start to 2024</a><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> 21 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a><span><br /> 19 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a><span><br /> 14 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a><span><br /> 13 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a><span><br /> 12 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a><span><br /> 1 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a><span><br /> 30 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a><span><br /> 23 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a><span><br /> 22 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a><span>?<br /> 17 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a><span><br /> 16 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-16-nov-2023---commodities-16112023"><strong><span>Podcast: Silver comeback, watch OPEC as crude oil slides lower</span></strong></a><span><br /> 16 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-weakness-adds-focus-to-upcoming-opec-meeting-16112023"><strong><span>Crude oil weakness adds focus to upcoming OPEC meeting</span></strong></a><span><br /> 15 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/soft-cpi-lifts-gold-and-beaten-down-silver-and-platinum-15112023"><strong><span>Soft CPI lifts gold and beaten down silver and platinum</span></strong></a><span><br /> 12 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/copper-update---21-november-2023-21112023"><strong><span>Copper supported by green transformation demand and peak rate speculation</span></strong></a><span>&nbsp;<br /> 10 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---10-november-2023-10112023"><strong><span>Commodity weekly: Crude oil risks overshooting the downside</span></strong></a></p> <p><strong><span>Previous "Commitment of Traders" articles<br /> </span></strong><strong><span><br /> </span></strong><span>8 Jan 2024</span><strong><span>:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024">COT: Weakest commodities conviction since 2015</a><br /> </span></strong><span>18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An underowned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a><span><br /> 20 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023"><strong><span>COT: Crude selling slows, grains in demand</span></strong></a><span><br /> 14 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023"><strong><span>COT: Crude long slumps; agriculture sector in demand</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Inflation</span> <span>Federal Reserve</span> <span>Crude Oil</span> <span>Gas Oil</span> <span>Heating Oil</span> <span>Oil</span> <span>Oil and Gas</span> <span>China</span></div>Wed, 10 Jan 2024 13:00:00 Z2024-01-26T13:57:20Z{6E40632B-7D70-4093-824F-2E3069B3DF54}https://www.home.saxo/content/articles/quarterly-outlook/year-of-the-metals-09012024Ole HansenPrimary-Quarterly OutlookYear of the metals<div class="article-excerpt">The new year could become the year of metals with a focus on gold, silver, platinum, copper, and aluminium. In precious metals we believe the prospect for lower real yields and a reduction in the cost of holding a non-interest paying position will support demand, especially through exchange-traded products where investors have been net sellers for the past seven quarters. Industrial metals stand to benefit from supply disruptions, industry restocking as funding costs coming down, and continued demand growth in China offsetting the rest of the world’s weakness. This will, not least, be driven by the green transformation which will keep gathering momentum. In some cases replacing demand for copper and aluminium from traditional end users, who could suffer from a weakening economic outlook in 2024.</div><div class="article-rte"><div class="rte--output"><h4 class="article-heading--4">Gold and silver to benefit from lower real yields and funding costs</h4> <p class="text--body">Following a surprisingly robust performance in 2023, we see further price gains in 2024. Gains driven by a trifecta from momentum-chasing hedge funds, central banks continuing to buy bullion at a record pace, and renewed demand from ETF investors, such as asset managers&mdash;they&rsquo;ve been absent for almost two years amid the rise in real yields and increased carry costs.&nbsp;</p> <p class="text--body">With the US Federal Reserve pivoting towards rate cuts, we see the current number of expected rate cuts being justified by a soft landing, while a hard landing or recession would trigger an even bigger need for rate cuts. Record central bank buying in the past two years was the main reason gold managed to rally, despite surging real yields, and why silver suffered more during periods of correction. It did not enjoy that constant, underlying demand. With ETFs, demand is likely to return, and with central bank demand continuing, potentially supported by a weaker dollar, we could see gold reaching a fresh record high at $2300. Silver may find additional support from the expected rally in copper and challenge the 2021 high at $30, signalling a fall in the gold-silver ratio below the 10-year average around the 78.3 ratio.&nbsp;</p></div></div><div class="article-image"><img alt="ole-01" src="https://www.home.saxo/-/media/content-hub/images/2024/january/qo1-2024/ole-01.jpg"/></div><div class="article-additional-rte"><div class="rte--output"><p>In platinum, the combination of largely inelastic demand and risks to uneconomic supply being curtailed have the potential to exacerbate deficits and tighten market conditions. This would enhance a recovery in ETF holdings from a four-year low, and as with silver, create the prospect of platinum doing better than gold next year. It could potentially drive a 250-dollar reduction in its discount towards the five-year average around $750 an ounce.&nbsp;</p> <h4>Copper and aluminium supported by supply disruptions and green transformation</h4> <p>The industrial metal sector also stands to benefit from the prospect of lower funding costs driving a long overdue period of industry restocking from China to the rest of the world. Copper remains our favourite industrial metal, because there are expectations for robust demand, as seen in China this past year. This has kept exchange monitored stocks near a multi-year low. Increasingly, there&rsquo;s also a risk of supply disruptions and production downgrades.</p> <p>We&lsquo;ve seen major supply disruptions, specifically for copper, the so-called King of green metals due to its multiple application usage. These disruptions have been led by the government enforced closure of the First Quantum operated Cobra Panama mine. Other mining companies such as Rio Tinto, Anglo American and Southern copper have all been making downgrades, primarily due to rising challenges in Peru and Chile. Overall, it paints a picture of a mining industry challenged by rising costs, lower ore grades and increasing government intervention.&nbsp;</p> <p>For now, given the wide spectra of challenges mining companies will face in the coming years, some of which have raised the all-in costs of production and with that their profitability, we prefer direct exposure to the underlying metals, primarily through ETFs.</p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/thought-leadership/quarterly-outlook">Quarterly Outlook</a></div>Tue, 09 Jan 2024 07:00:00 Z2024-03-27T10:51:42Z{9DDE5400-CF77-40B2-9041-B91CC91634BD}https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---8-jan-2024-08012024Ole Hansenproduct-commoditiesCOT Commoditiescommodity-crude oilcommodity-natural gascommodity-goldcommodity-silvercommodity-coppercommodity-platinumcommodity-corncommodity-sugarcommodity-coffeecommodity-gasolinecommodity-palladiumcommodity-wheatcommodity-cocoacommodity-cottoncommodity-cattlesector-gics-1010product-forexCOT FXforex-eurusdforex-usdjpyforex-audusdforex-usdcadforex-usdchfforex-gbpusdforex-nzdusdsubject-is/fin.stpbondBonds Inspirationproduct-bondsproduct-forexEn hurtig tankeCOT: Weakest commodities conviction since 2015 <div class="article-excerpt">Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to last Tuesday, January 2</div><div class="article-rte"><div class="rte--output"><em>Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities while in forex we use the broader measure called non-commercial.</em></div></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>What is the Commitments of Traders report?</span></h3> <br /> <p>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.</p> <p>Commodities: Producer/Merchant/Processor/User, Swap dealers,&nbsp;<span>Managed Money</span>&nbsp;and other<br /> Financials: Dealer/Intermediary; Asset Manager/Institutional;&nbsp;<span>Leveraged Funds</span>&nbsp;and other<br /> Forex: A broad breakdown between commercial and&nbsp;<span>non-commercial</span>&nbsp;(speculators)</p> <p>The main reasons why we focus primarily on the behavior of speculators, such as hedge funds and trend-following CTA's are:</p> <ul> <li>They are likely to have&nbsp;<span>tight stops</span>&nbsp;and&nbsp;<span>no underlying exposure</span>&nbsp;that is being hedged</li> <li>This makes them&nbsp;<span>most reactive to changes</span>&nbsp;in fundamental or technical price developments</li> <li>It provides views about&nbsp;<span>major trends</span>&nbsp;but also helps to decipher when a&nbsp;<span>reversal</span>&nbsp;is looming</li> </ul> <p>Do note that&nbsp;<span >this group tends to <strong>anticipate, accelerate, and amplify</strong> price changes that have been set in motion by <strong>fundamentals</strong>. Being followers of momentum, this strategy often sees this group of traders buy into strength and sell into weakness, meaning that they are often found holding the biggest long near the peak of a cycle or the biggest short position ahead of a through in the market.</span></p></div></div><div class="article-additional-rte"><div class="rte--output"><span></span> <div> <span></span> <span></span> <div> <span></span> <div> <div> <div> <div> <div> <div> <div> <span></span> <div> <div> <span data-contrast="none"></span><span></span> <div> <span data-contrast="none"></span> <div> <span data-contrast="none"></span> <div> <span></span> <p><span>This summary highlights futures positions and changes made by hedge funds across commodities and forex in the week to last Tuesday, January 2. Covering an end of year week that saw equity market gains being defended, the dollar trading a tad firmer, mixed bond yields, while the commodity sector slumped with losses being led by the energy and grains sector. Overall resulting in hedge funds holding the smallest end of year net long across 24 major commodities since 2015.</span><span ></span></p> <h3 class="article-heading--3"><span>Commodities:</span></h3> <p><span>The Bloomberg Commodity index which tracks a basket of 24 major futures markets split near evenly between energy, metals and agriculture, traded lower by 1.8% on the week driven by losses across all sector most notably energy (-3.6%) and grains (-3.5%) with the biggest individual losses seen in crude oil (-6.9%), palladium (-9%), fuel products, wheat and soybeans.</span></p> <p><span>As a result of this weakness, the net long held by hedge funds and CTAs slumped 25% to 307k lots, the weakest end of year position since 2015, split between energy (322k), metals (181k) and agriculture (-196k). Long positions were held in 14 while the 10 net short positions were mostly held across the agriculture sector led by grains. The biggest long positions based on a notional dollar value were gold ($28.5 bn), crude oil ($19.2 bn), RBOB gasoline ($6.3 bn) and Arabica coffee ($2.9 bn) while the biggest short positions were corn (-$4.6 bn), wheat (-$1.8 bn) and soybean oil (-$1.5 bn)&nbsp;</span></p> </div> </div> </div> <span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}" ></span></div> </div> <p paraid="1396398248" paraeid="{a9890f65-bd09-43ce-b941-e232248f0c46}{133}"><span data-contrast="auto"> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p><span> </span></p> <p><span> </span></p> </div> </div> </div> <div> <span data-ccp-props="{'201341983':0,'335559740':259}" ></span></div> </div> </div> <div> <p paraid="739880928" paraeid="{6472d595-91b7-4440-89e9-890d4acd9c8e}{166}"><span data-contrast="none"> </span></p> </div> <p><span> </span></p> </div> <div> <p paraid="1053527918" paraeid="{f64664da-5092-46b8-866f-464e46bdf07a}{149}"><span data-ccp-props="{}"></span></p> </div> </div> </div> </div></div></div><div class="article-image"><img alt="8olh_cot1" src="https://www.home.saxo/-/media/content-hub/images/2024/january/8olh_cot1.png"/></div><div class="article-additional-rte"><div class="rte--output"><p><span>These developments highlight an increasingly under-owned asset class which struggled last year amid growth worries in China and the wider world, and a sharp rise in funding costs leading industries to reduce excess inventories. It also highlights a sector which, given the right circumstances, may rebound in 2024 once the technical and/or fundamental outlook becomes more supportive, thereby leading to fresh buying and short covering. Drivers that may trigger such a change could be rate cuts lowering the funding costs and with that the inherent contango leading to industry restocking of inventories, OPEC maintaining a tight control of the supply of crude oil, and not least signs of tightness across key commodities that will help offset the risk of an economic slowdown across key economies. </span></p></div></div><div class="article-image"><img alt="8olh_cot2" src="https://www.home.saxo/-/media/content-hub/images/2024/january/8olh_cot2.png"/></div><div class="article-image"><img alt="8olh_cot3" src="https://www.home.saxo/-/media/content-hub/images/2024/january/8olh_cot3.png"/></div><div class="rte--output">Funds sold 65k lots of crude oil with the combined net long in Brent and WTI falling by 20% to 259k lots, the reduction primarily being driven by fresh short selling during a week where prices slumped by more than 6%. </div><br/><div class="article-image"><img alt="8olh_cot4" src="https://www.home.saxo/-/media/content-hub/images/2024/january/8olh_cot4.png"/></div><div class="rte--output">Only minor changes seen in gold and silver while platinum saw a 40% increase in the net long to 6.7k lots, and copper, where recent buying was cut by one-third on profit taking. Palladium’s 9% rally only help trigger a small reduction in the net short to 6.3k</div><br/><div class="article-image"><img alt="8olh_cot5" src="https://www.home.saxo/-/media/content-hub/images/2024/january/8olh_cot5.png"/></div><div class="rte--output">Grains: The grains and soy net short (Six contracts) reached a 3-1/2-year high at 311k lots on broad selling led by soybeans, soymeal, and corn. In the last ten-years speculators have only held a bigger end of year short positions on two occasions, the latest being 2017. The soybean short at 11.6k was the biggest since March 2020</div><br/><div class="article-image"><img alt="9olh_cot6" src="https://www.home.saxo/-/media/content-hub/images/2024/january/9olh_cot6.png"/></div><div class="rte--output">In softs, selling of sugar extended to a sixth week driving the net long to a 14-month low. Going in the opposite direction was Arabica coffee where the net long reached a 15-month high at 41k lots. </div><br/><div class="article-image"><img alt="8olh_cot7" src="https://www.home.saxo/-/media/content-hub/images/2024/january/8olh_cot7.png"/></div><div class="rte--output">In forex, short selling of the dollar extended to a seventh week despite end of year strength which saw the Dollar index rise 1.2% during the reporting week to January 2. Overall, the gross dollar short against eight IMM forex futures and the DXY jumped by one-quarter to $9.5 billion, highest since August, with the most notable flows being short covering in CAD and AUD and fresh buying of EUR </div><br/><div class="article-additional-rte"><div class="rte--output"><hr /> <p><span>5 Jan 2024: <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024">Commodity weekly: Bumpy start to 2024</a><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024"><strong><span>What to watch in crude oil as 2024 gets underway</span></strong></a><span><br /> 4 Jan 2024:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-4-jan-2024---commodities-04012024"><strong><span>Podcast: Crude oil and gold in focus as a new year begins</span></strong></a><span><br /> 21 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023"><strong><span>Weather, rates and unrest paint muddy picture for commodities in 2023</span></strong></a><span><br /> 19 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a><span><br /> 14 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a><span><br /> 13 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a><span><br /> 12 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a><span><br /> 1 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a><span><br /> 30 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a><span><br /> 23 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a><span><br /> 22 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a><span>?<br /> 17 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a><span><br /> 16 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-16-nov-2023---commodities-16112023"><strong><span>Podcast: Silver comeback, watch OPEC as crude oil slides lower</span></strong></a><span><br /> 16 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-weakness-adds-focus-to-upcoming-opec-meeting-16112023"><strong><span>Crude oil weakness adds focus to upcoming OPEC meeting</span></strong></a><span><br /> 15 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/soft-cpi-lifts-gold-and-beaten-down-silver-and-platinum-15112023"><strong><span>Soft CPI lifts gold and beaten down silver and platinum</span></strong></a><span><br /> 12 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/copper-update---21-november-2023-21112023"><strong><span>Copper supported by green transformation demand and peak rate speculation</span></strong></a><span>&nbsp;<br /> 10 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---10-november-2023-10112023"><strong><span>Commodity weekly: Crude oil risks overshooting the downside</span></strong></a></p> <p><strong><span>Previous "Commitment of Traders" articles</span></strong><strong><span><br /> <br /> </span></strong><span>18 Dec 2023:</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An underowned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a><span><br /> 20 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023"><strong><span>COT: Crude selling slows, grains in demand</span></strong></a><span><br /> 14 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023"><strong><span>COT: Crude long slumps; agriculture sector in demand</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>COT Commodities</span> <span>Crude Oil</span> <span>Natural Gas</span> <span>Gold</span> <span>Silver</span> <span>Copper</span> <span>Platinum</span> <span>Corn</span> <span>Sugar</span> <span>Coffee</span> <span>Gasoline</span> <span>Palladium</span> <span>Wheat</span> <span>Cocoa</span> <span>Cotton</span> <span>Cattle</span> <span>Energy (Sector)</span> <span>Forex</span> <span>COT FX</span> <span>EURUSD</span> <span>USDJPY</span> <span>AUDUSD</span> <span>USDCAD</span> <span>USDCHF</span> <span>GBPUSD</span> <span>NZDUSD</span> <span>Government Bonds</span> <span>Bonds nspiration</span> <a href="https://www.home.saxo/insights/news-and-research/bonds">Bonds</a> <a href="https://www.home.saxo/insights/news-and-research/forex">Forex</a> <span>En hurtig tanke</span></div>Mon, 08 Jan 2024 09:20:00 Z2024-03-27T10:51:45Z{7A20FDC7-79EC-43DD-929B-4254C7753536}https://www.home.saxo/content/articles/commodities/commodity-weekly---5-jan-2024-05012024Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal Reservecommodity-gas oilcommodity-crude oilcommodity-heating oilsector-Oil and GasOilcommodity-copperAgricultureplace-lc/cnHighlighted articlescommodity-wheatIron Orecommodity-natural gasCommodity weekly: Bumpy start to 2024<div class="article-excerpt">A mixed start to 2024 with losses in metals and agriculture being offset by gains across the energy sector</div><div class="article-rte"><div class="rte--output"><p paraid="49135560" paraeid="{bf2fd703-a79b-4442-a3e7-161129ecb2fd}{167}"><span data-contrast="auto">The first few weeks of a new trading year are always a period that should be treated with a bit of caution when it comes to looking for trading signals, direction and themes. This past week has been no exception, especially across global stock markets which have started 2024 on a defensive note, primarily driven by traders taking a rain check on the durability of the strong gains that lined the pockets of traders and investors ahead of year end. The early November focus change from additional rate hikes to the prospect of lower rates in 2024 as signaled by several central banks, led by the US Federal Reserve, helped trigger a major end of year rally in stocks with the MSCI world index up 14.5% during the final two months.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1898957432" paraeid="{bf2fd703-a79b-4442-a3e7-161129ecb2fd}{237}"><span data-contrast="auto">Friday&rsquo;s US job report together general US economic data strength helped deflate these expectations raising doubts about the timing of the first and the depth of subsequent US rate cuts. From a near certain expectation for a March cut, swap traders have now lowered those expectations to around 50% while the number of 25 basis points cuts this year has fallen from above six to near five.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1084258103" paraeid="{cce05c72-256c-41a5-bb33-c33d51f238b0}{14}"><span data-contrast="auto">Turning to commodities, the Bloomberg Commodity Total Return index trades nearly unchanged on the week with losses across metals and agriculture being offset by gains in the energy sector. The focus and drivers behind these moves have been the aforementioned negative input from the lowering of US rate cut expectations, weak economic data prints from China, geopolitical risks associated with Red Sea, as well as pockets of very cold weather across the Northern Hemisphere lifting demand for gas and power.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p><span> </span></p> <p><span> </span></p></div></div><div class="article-image"><img alt="5olh_wcu1" src="https://www.home.saxo/-/media/content-hub/images/2024/january/5olh_wcu1.png"/></div><div class="article-additional-rte"><div class="rte--output"><p><span> </span></p> <div> <h3><span data-contrast="auto">Elevated stock levels preventing a cold weather driven natural gas surge</span></h3> </div> <div> <p paraid="1437707562" paraeid="{cce05c72-256c-41a5-bb33-c33d51f238b0}{93}"><span data-contrast="auto">Last year&rsquo;s big losers have started up strongly this past week with natural gas prices rising across the world as robust winter demand helps offset bulging stock levels in the US and Europe. US gas prices trades up around 7% on the week but remain down by more than one-third compared with this time last year while in Europe, the Dutch TTF benchmark gas contracts trade down around 55% year-on-year. This follows a year where the combination of slowing demand, a mild autumn and reconfigured supply chains towards LNG instead of Russian gas have seen inventories surge. EU storage sites are currently 86.5% full compared with a five-year seasonal average closer to 70%. Meanwhile, in the US gas prices trade below $3 with US inventories ending 2023 at the highest seasonal level since 2015 following a year of record production, lower weather-related demand, and despite surging exports.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div></div></div><div class="article-image"><img alt="5olh_wcu2" src="https://www.home.saxo/-/media/content-hub/images/2024/january/5olh_wcu2.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <h3><span data-contrast="auto">Gold sees weekly loss on Fed rate cut delay</span></h3> </div> <div> <p paraid="833481981" paraeid="{cce05c72-256c-41a5-bb33-c33d51f238b0}{206}"><span data-contrast="auto">Gold has seen a relatively quiet start to 2024, trading down around 1.5% during a week that included Friday&rsquo;s strong report has seen robust US economic data drive bond yields up and US rate cut expectations down. In addition, the ebb and flow of geopolitical risks associated with tensions in the Red Sea area has primarily been providing an underlying bid to gold with silver struggling to keep pace amid China related weakness across industrial metals. Developments which at one point during the week saw the gold-silver ratio hit a March high above 89 (ounces of silver to one ounce of gold). Overall, silver trades near the center of a four-dollar wide range between $21.4 and $25.4.&nbsp;<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="1261620351" paraeid="{2e6d6cd2-da2d-4282-a41c-41b2d97a2225}{3}"><span data-contrast="auto">Following on from a surprisingly robust performance in 2023 that saw gold end up 13%, we see further price gains for the yellow metal and with that also silver in 2024, driven by a trifecta of momentum chasing hedge funds, central banks continuing to buy bullion at a record pace and not least, renewed demand from ETF investors, such as asset managers, who have been absent for almost two years amid the rise in real yields and increased carry costs. With the US Federal Reserve pivoting towards rate cuts, we see the guessing game with regards to the number of rate cuts being a major drive of volatility in the months ahead, with the current level of expected cuts being justified by a soft landing while a hard landing or recession would trigger an even bigger need for rate cuts.&nbsp;<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="974673683" paraeid="{2e6d6cd2-da2d-4282-a41c-41b2d97a2225}{39}"><span data-contrast="auto">We see the prospect of gold reaching a fresh record high at $2300 while silver, finding additional support from an expected rally in copper, may travel towards the 2021 high at $30, signaling a fall in the gold-silver ratio back towards its 10-year average below 80.<br /> </span></p> </div></div></div><div class="article-image"><img alt="5olh_wcu3" src="https://www.home.saxo/-/media/content-hub/images/2024/january/5olh_wcu3.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><div> <h3><span data-contrast="auto">Crude oil: rangebound quarter ahead</span></h3> </div> <div> <p paraid="1067725354" paraeid="{2e6d6cd2-da2d-4282-a41c-41b2d97a2225}{80}"><span data-contrast="auto">In our latest </span><span data-contrast="none"><a href="https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024">update</a></span><span data-contrast="auto"> covering developments across the crude oil market, we conclude that Brent is likely to remain rangebound around $80 during the coming quarter as non-OPEC+ supply and global growth concerns offset production cuts, Middle East tensions and another rise in global demand, albeit at a slower pace than last year. The OPEC+ group of producers will continue to support prices by extending and potentially deepening the current production cuts. In the process they are yielding market share while adding to the level of available spare capacity. The timing of the first and the subsequent pace of US rate cuts will add volatility to the market from macro-focused speculators.<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <h3><span data-contrast="auto">Hedge funds remained cautious ahead of 2024</span></h3> </div> <div> <p paraid="1254528434" paraeid="{2e6d6cd2-da2d-4282-a41c-41b2d97a2225}{117}"><span data-contrast="auto">In the previous two years, the Bloomberg Commodity Total Return Index &ndash; which tracks the performance of 24 major commodity futures, spread evenly between energy, metals and agriculture &ndash; has returned 27% in 2021 and 16% in 2022. With that in mind, it was not unreasonable, given the challenges last year, to see the index give back around 8%. Do note though that if we exclude US natural gas, which slumped 67%, from the index it would trade near unchanged on the year.&nbsp;<br /> &nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="167347997" paraeid="{2e6d6cd2-da2d-4282-a41c-41b2d97a2225}{135}"><span data-contrast="auto">The aforementioned weakness helped drive </span><span data-contrast="auto">continued selling by hedge funds and commodity trading advisors (CTA) between October to early December. The result being a slump in the net long position across 24 major commodity futures to levels last seen at the depths of the Covid crisis in early 2020 when global demand for commodities, especially fuel, fell off a cliff. While the Red Sea crisis in early December helped drive fresh demand for crude oil, the total net long nevertheless ended the year at its weakest level since 2015.<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="120107705" paraeid="{2e6d6cd2-da2d-4282-a41c-41b2d97a2225}{185}"><span data-contrast="auto">These developments highlight an increasingly under-owned asset class which struggled last year amid growth worries in China and the wider world, and a sharp rise in funding costs leading industries to reduce excess inventories. It also highlights a sector which, given the right circumstances, may rebound in 2024 once the technical and/or fundamental outlook becomes more supportive, thereby leading to fresh buying and short covering. Drivers that may trigger such a change could be rate cuts lowering the funding costs and with that the inherent contango leading to industry restocking of inventories, OPEC maintaining a tight control of the supply of crude oil, and not least signs of tightness across key commodities that will help offset the risk of an economic slowdown across key economies.&nbsp;&nbsp;<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="1628259637" paraeid="{2e6d6cd2-da2d-4282-a41c-41b2d97a2225}{211}"><span data-contrast="auto">On December 26 managed money accounts held a 409,000 contracts net long across 24 major commodity futures contracts split between energy (356k), metals (179k) and agriculture (-126k). Long positions were held in 15 while the 9 net short positions were mostly held across the agriculture sector led by grains. The biggest long positions based on a notional dollar value were gold ($28 bn), crude oil ($25.6 bn), RBOB gasoline ($6.3 bn) and Arabica coffee ($2.9 bn) while the biggest short positions were corn (-$4.3 bn), wheat (-$1.9 bn) and natural gas (-$1.7 bn)&nbsp;&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div></div></div><div class="article-image"><img alt="5olh_wcu4" src="https://www.home.saxo/-/media/content-hub/images/2024/january/5olh_wcu4.png"/></div><div class="article-additional-rte"><div class="rte--output"><hr /> <p><span><strong>Commodity articles:</strong></span></p> <ul> <li><span>30 Nov 2023: <a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023">Precious metals take top spot for a second month</a></span></li> <li><span>23 Nov 2023: <a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023">A nervous crude oil market awaits OPEC's next move</a></span></li> <li><span>23 Nov 2023: Podcast:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023">Will Santa deliver another golden gift</a></li> <li>22 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023">Will gold and silver see another Santa rally</a><span>?</span></li> <li><span>16 Nov 2023: <a href="https://www.home.saxo/content/articles/podcast/podcast-16-nov-2023---commodities-16112023">Podcast: Silver comeback, watch OPEC as crude oil slides lower</a></span></li> <li><span>16 Nov 2023: <a href="https://www.home.saxo/content/articles/commodities/crude-oil-weakness-adds-focus-to-upcoming-opec-meeting-16112023">Crude oil weakness adds focus to upcoming OPEC meeting</a></span></li> <li><span>15 Nov 2023: <a href="https://www.home.saxo/content/articles/commodities/soft-cpi-lifts-gold-and-beaten-down-silver-and-platinum-15112023">Soft CPI lifts gold and beaten down silver and platinum</a></span></li> <li><span></span>12 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/copper-update---21-november-2023-21112023">Copper supported by green transformation demand, China stimulus and peak rate speculation</a>&nbsp;</li> </ul> <p><span><strong>Previous "Commodity Weekly" articles</strong></span></p> <ul> <li>1 Dec 2023: <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023">Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</a></li> <li>17 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023">Commodity weekly: Crude overshoots; silver the comeback kid</a></li> <li>10 Nov 2023: <a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---10-november-2023-10112023">Commodity weekly: Crude oil risks overshooting the downside</a></li> </ul> <strong>Previous "Commitment of Traders" articles<br /> <br /> </strong> <ul> <li>4 Dec 2023: <a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023">COT: Speculators add further fuel to gold rally</a></li> <li>20 Nov 2023:&nbsp;<a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023">COT: Crude selling slows, grains in demand</a></li> <li>14 Nov 2023: <a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023">COT: Crude long slumps; agriculture sector in demand</a></li> </ul></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Gas Oil</span> <span>Crude Oil</span> <span>Heating Oil</span> <span>Oil and Gas</span> <span>Oil</span> <span>Copper</span> <span>Agriculture</span> <span>China</span> <span>Highlighted articles</span> <span>Wheat</span> <span>Iron Ore</span> <span>Natural Gas</span></div>Fri, 05 Jan 2024 14:00:00 Z2024-03-27T10:51:43Z{11B79770-403D-4FBD-835E-10788987558E}https://www.home.saxo/content/articles/commodities/what-to-watch-in-crude-oil-as-2024-gets-underway-04012024Ole Hansenproduct-commoditiesInflationFederal Reservecommodity-crude oilcommodity-gas oilcommodity-heating oilOilsector-Oil and GasStagflationThought StartersAdvanced ordersWeekly NewsletterWhat to watch in crude oil as 2024 gets underway<div class="article-excerpt">Crude oil traders have started the year on a cautionary note with global growth and demand worries offsetting rising geopolitical risks</div><div class="article-rte"><div class="rte--output"><span></span> <h3 class="article-heading--3">Key points</h3> <ul> <li><span>Crude oil is likely to remain rangebound around $80 in Brent during the coming quarter</span></li> <li><span>Non-OPEC+ supply and demand concerns offset</span><span>&nbsp;OPEC+ cuts</span><span>, </span><span>Mideast tensions</span></li> <li><span></span><span>The </span><span>timing of</span><span> the first</span><span> and the </span><span>subsequent</span><span> </span><span>pace of US rate cuts </span><span>will add volatility</span></li> </ul> &nbsp; <div> <p paraid="1192619343" paraeid="{7f096c15-f796-4e2c-861a-6cf41a5d24b8}{152}"><span data-contrast="auto">Crude oil traders have started the year on a cautionary note with global growth and demand worries offsetting rising geopolitical risks related to developments in and around the Red Sea where attacks on commercial ships last month forced shippers to reroute cargoes from the Middle East and Asia, thereby raising costs and journey times. It is also worth keeping in mind that the first few weeks of trading will likely, just like most other years, trigger some volatile trading as trigger happy speculators will be looking for trading signals, in the process creating choppy trading conditions.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="2102034822" paraeid="{7f096c15-f796-4e2c-861a-6cf41a5d24b8}{194}"><span data-contrast="auto">We see an increased likelihood of crude oil staying rangebound in the coming months with no single trigger being strong enough to change the dynamics of a market that has divided its focus between growth worries, not least in China and the USA, as well as rising non-OPEC+ production on one hand and OPEC+ cuts and geopolitical risks on the other. On top of this we may see risk appetite ebb and flow in line with changes in the expected pace of US rate cuts. With that in mind, we see Brent crude oil remain rangebound around $80 per barrel during the first quarter with the biggest risk to the downside being a disunited OPEC+ leading to a collapse in the current agreement to keep production down, and the upside from a major geopolitical event disrupting the flow of crude oil and gas from the Middle East.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="797877623" paraeid="{7f096c15-f796-4e2c-861a-6cf41a5d24b8}{252}"><span data-contrast="auto">Brent spent last year trading in a relatively small 27.5-dollar range compared with the 64-dollar range seen in 2022 when the war in Ukraine drove the market sharply higher, before collapsing, and overall, the front month futures contract in Brent ended 6% lower on the year while WTI was 7% lower. From an investor's perspective both futures contracts traded in backwardation through most of the year and given the positive impact on rolling contracts in such an environment saw the negative result reduced to -1% in Brent and -2% in WTI.<br /> <br /> For a more detailed look at the technical outlook please click<a href="https://www.home.saxo/content/articles/commodities/technical-analysis-wti-brent-oil-dutch-gas-henry-hub-gas-04012024"> here</a> to read the latest from Kim Cramer, Saxo's technical analysis specialist.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <p paraid="889907689" paraeid="{a0b0feea-5c34-44a4-9f98-dff5a581782d}{97}"><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p></div></div><div class="article-image"><img alt="4olh_oil0" src="https://www.home.saxo/-/media/content-hub/images/2024/january/4olh_oil0.png"/></div><div class="rte--output">Source: Saxo</div><br/><div class="article-additional-rte"><div class="rte--output"><div> <div> <p paraid="274792471" paraeid="{f36d743b-67df-4b22-a4eb-32d92bd6fed7}{44}"><span data-contrast="auto">At the current price near $80, Brent trades just a couple of bucks below last year&rsquo;s average price and the current 200-day moving average just above $82, and while the relatively small range as mentioned can be credited to OPEC+ and its attempt to maintain stable prices through actively managing supply, there is no doubt that the group would have liked to see prices higher. But rising production from the US, Iran, Venezuela, Guyana and others, together with Q4 demand weakness, left the group with only with a half victory given the failure to boost prices while surrendering market share.&nbsp;<br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> <div> <p paraid="2136482388" paraeid="{f36d743b-67df-4b22-a4eb-32d92bd6fed7}{116}"><span data-contrast="auto">Being forced to surrender additional market share in order to keep prices supported above $70 remain a key risk to the unity of the group, not least given the prospect of weaker demand growth and continued robust production from non-OPEC+ nations putting downward pressure on OPEC+ market share and upward pressure on available spare capacity, not least from Saudi Arabia which holds more than 3 million barrels per day of spare capacity, a development that in normal times should help curb any price rally given the strong incentive to bring more oil back to the market.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div> </div></div></div><div class="article-image"><img alt="4olh_oil1" src="https://www.home.saxo/-/media/content-hub/images/2024/january/4olh_oil1.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <p paraid="1051626906" paraeid="{f36d743b-67df-4b22-a4eb-32d92bd6fed7}{189}"><span data-contrast="auto">Speculators such as hedge funds and CTAs will, just like last year, continue to play an important role when it comes to setting highs and lows in the market. These often momentum following trading strategies tends to anticipate, accelerate, and amplify price changes that have been set in motion by fundamentals. However, being followers of momentum, this strategy often sees this group of traders buy into strength and sell into weakness, meaning that they are often found holding the biggest long near the peak of a cycle or the biggest short position ahead of a through in the market.</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> <p paraid="1087377205" paraeid="{f36d743b-67df-4b22-a4eb-32d92bd6fed7}{217}"><span data-contrast="auto">Last year&rsquo;s rangebound trading behavior was a constant challenge for momentum following speculators, leading to several situations where they ended up holding the wrong position when Brent and WTI instead of continuing a trend, suddenly reversed as the technical outlook changed, driven among others by OPEC+ production decisions, US rate cut expectations, China developments and geopolitical events. From a 491-million-barrel net long in February to a 231-million-barrel low in June before reaching a two-year high in September at 560 million, only to collapse to an 11-year low at 171 million at the beginning of December, before Red Sea disruptions helped support a strong two-week rebound ahead of yearend.&nbsp;</span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div></div></div><div class="article-image"><img alt="4olh_oil4" src="https://www.home.saxo/-/media/content-hub/images/2024/january/4olh_oil4.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <h3><span data-contrast="auto">Conclusion:</span></h3> </div> <div> <p paraid="1763605855" paraeid="{d2e67f24-5fad-449d-bd71-f75a98b2d06d}{37}"><span data-contrast="auto">Crude oil is likely to remain rangebound around $80 in Brent during the coming quarter as non-OPEC+ supply and global growth concerns offset production cuts, Middle East tensions and another rise in global demand, albeit at a slower pace than last year. The OPEC+ group of producers will continue to support prices by extending and potentially deepening the current production cuts, in the process yielding market share while adding to the level of available spare capacity. The timing of the first and the subsequent pace of US rate cuts will add volatility to the market from macro-focused speculators.<br /> <br /> </span><span data-ccp-props="{'201341983':0,'335559739':160,'335559740':276}"></span></p> </div></div></div><div class="article-additional-rte"><div class="rte--output"><hr /> <br /> <p><strong><span>Commodity articles:</span></strong></p> <p><span>21 Dec 2023: <a href="https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023">Weather, rates and unrest paint muddy picture for commodities in 2023</a><br /> 19 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023"><strong><span>Crude and gas pop on Red Sea Disruption Risks</span></strong></a></span><span><br /> 14 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a><span><br /> 13 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong><span>Video - Why gold may enjoy a Santa rally for the 7th year in a row</span></strong></a><span><br /> 12 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023"><strong><span>Video - Investing in Uranium</span></strong></a><span><br /> 1 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023"><strong><span>Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</span></strong></a><span><br /> 30 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023"><strong><span>Precious metals take top spot for a second month</span></strong></a><span><br /> 23 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023"><strong><span>A nervous crude oil market awaits OPEC's next move</span></strong></a><span><br /> 23 Nov 2023: Podcast:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023"><strong><span>Will Santa deliver another golden gift</span></strong></a><span><br /> 22 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023"><strong><span>Will gold and silver see another Santa rally</span></strong></a><span>?<br /> 17 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023"><strong><span>Commodity weekly: Crude overshoots; silver the comeback kid</span></strong></a><span><br /> 16 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-16-nov-2023---commodities-16112023"><strong><span>Podcast: Silver comeback, watch OPEC as crude oil slides lower</span></strong></a><span><br /> 16 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-weakness-adds-focus-to-upcoming-opec-meeting-16112023"><strong><span>Crude oil weakness adds focus to upcoming OPEC meeting</span></strong></a><span><br /> 15 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/soft-cpi-lifts-gold-and-beaten-down-silver-and-platinum-15112023"><strong><span>Soft CPI lifts gold and beaten down silver and platinum</span></strong></a><span><br /> 12 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/copper-update---21-november-2023-21112023"><strong><span>Copper supported by green transformation demand and peak rate speculation</span></strong></a><span>&nbsp;<br /> 10 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---10-november-2023-10112023"><strong><span>Commodity weekly: Crude oil risks overshooting the downside</span></strong></a></p> <p><strong><span>Previous "Commitment of Traders" articles</span></strong><strong><span><br /> <br /> <strong><span>18 Dec 2023:&nbsp;</span></strong></span></strong><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023"><strong><span>COT: Crude long hits 12-year low ahead of FOMC bounce</span></strong></a><span><br /> 11 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong><span>COT: An underowned commodity sector raising risk of an upside surprise in 2024</span></strong></a><span><br /> 4 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023"><strong><span>COT: Speculators add further fuel to gold rally</span></strong></a><span><br /> 20 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023"><strong><span>COT: Crude selling slows, grains in demand</span></strong></a><span><br /> 14 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023"><strong><span>COT: Crude long slumps; agriculture sector in demand</span></strong></a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Inflation</span> <span>Federal Reserve</span> <span>Crude Oil</span> <span>Gas Oil</span> <span>Heating Oil</span> <span>Oil</span> <span>Oil and Gas</span> <span>Stagflation</span> <a href="https://www.home.saxo/insights/news-and-research/thought-starters">Thought Starters</a> <span>Advanced orders</span> <span>Weekly Newsletter</span></div>Thu, 04 Jan 2024 10:00:00 Z2024-03-27T10:51:43Z{B67A3684-9A4D-4596-BDCE-FDC27894A787}https://www.home.saxo/content/articles/commodities/weather-rates-and-unrest-paint-muddy-picture-for-commodities-in-2023-21122023Ole Hansenproduct-commoditiescommodity-goldcommodity-silverInflationFederal Reservecommodity-gas oilcommodity-crude oilcommodity-heating oilsector-Oil and GasOilcommodity-copperAgricultureplace-lc/cnHighlighted articlescommodity-wheatcommodity-natural gascommodities-weeklyprice update - commoditiesWeather, rates and unrest paint muddy picture for commodities in 2023<div class="article-excerpt">A look back on developments that shaped the commodities market in 2023</div><div class="article-rte"><div class="rte--output"><p><span>As the 2023 hourglass runs out, it&rsquo;s time to reflect on what kind of year it has been for commodities: a pretty mixed bag filled with good, bad and surprises. Aside from economic growth and demand concerns weighing on energy and industrial metals, diverging weather developments played an important role, leading to some of the best, but also worst performances.</span></p> <p><span>The year began on an optimistic note with focus on China&rsquo;s reopening after months of Covid-related lockdowns sending the market off to a good start. But it wasn&rsquo;t all bliss as markets grew increasingly worried about the risk of an economic fallout from continued and aggressive central bank rate hikes aimed at bringing inflation under control. These concerns only began to ease this quarter when markets finally received a nod that the next move in rates would likely be lower. A war in the Middle East, Russia&rsquo;s continued aggressions in Ukraine, and attacks on ships in Red Sea all added up to a year that saw increased geopolitical risks and with that an increasingly fragmented world. </span></p> <p><span>It was also a year that saw the green transformation gather momentum, especially in China where fuel demand looks set to peak next year. However, that focus did little to support capital intensive companies involved with the transition as they faced heavy selling pressure during the second half of the year amid lofty valuations coming under pressure from a rapid rise in the cost of money as interest rates and yields surged higher. Saxo&rsquo;s equity themes highlight this weakness with </span><span><a href="https://social.saxo/tuhx3ow?uuid=AE1EV4t"><span>green transformation</span></a></span><span>, </span><span><a href="https://social.saxo/t0jtylh?uuid=AE1EV4t"><span>renewable energy</span></a></span><span> and </span><span><a href="https://social.saxo/cteoysw?uuid=AE1EV4t"><span>energy storage</span></a></span><span> being the worst performing themes while the </span><span><a href="https://social.saxo/nhcmcs2?uuid=AE1EV4t"><span>commodities</span></a></span><span> theme is found near mid-table after returning around 12%. </span></p> <p><span>However, with funding costs coming down next year and with ongoing efforts to combat climate change, we suspect these under-owned sectors could see a comeback in 2024. With global demand for energy still rising, this transition process however is for now more of a green addition, after demand for gas, crude and coal also reached fresh record highs.</span></p> <p><span> </span></p> <p><span> </span></p></div></div><div class="article-image"><img alt="21olh_2023a" src="https://www.home.saxo/-/media/content-hub/images/2023/december/21olh_2023a.png"/></div><div class="article-additional-rte"><div class="rte--output"><p><span> </span></p> <p><span>In the previous two years, the Bloomberg Commodity Total Return Index &ndash; which tracks the performance of 24 major commodity futures, spread almost evenly between energy, metals and agriculture &ndash; has returned 27% in 2021 and 16% in 2022. With that in mind, it was probably not unreasonable, given the challenges this past year, to see the index give back around 8%. Do note that if we exclude US natural gas, which slumped 67%, from the index it would trade near unchanged on the year. </span></p> <p><span>Supporting returns was another year where several key commodities traded in backwardation, a situation that reflects tight market conditions, and it helped create a positive roll yield when expiring futures contracts were rolled into a lower priced next month contract. While the year-on-year roll yield has moderated to 3.3% from around 9.4% this time last year, it is still providing some tailwind for investors that was absent in the pre-Covid years when the roll yield was averaging around -5%. </span></p></div></div><div class="article-image"><img alt="21olh_2023b" src="https://www.home.saxo/-/media/content-hub/images/2023/december/21olh_2023b.png"/></div><div class="article-additional-rte"><div class="rte--output"><div> <p><span>At the beginning of the year the tightness was primarily seen across the energy sector &ndash; where crude oil and refined products, such as gasoline and especially diesel were very tight amid Russian sanctions and China demand optimism. However, from May onwards, the agriculture sector took over as El Ni&ntilde;o weather developments, primarily across the Southern Hemisphere, helped trigger tight market conditions and surging prices of sugar, cocoa and coffee &ndash; this year&rsquo;s top three performers - thereby more than offsetting the negative pull from weaker grain prices following a robust Northern Hemisphere harvest season. </span></p> <p><span>As per the table below, we can see the role that some key commodities have played in helping bring inflation under control. The UN Food and Agriculture Organization (FAO) food price index showed a 10.7% year-on-year drop in November, led by declines in grains such as wheat and corn, as well as vegetable oils and dairy. Natural gas, a key source of energy used in power generation, suffered major declines across the world, most notably in the US where record production and high inventories and mild weather helped drive a 67% slump, but also in Europe where gas prices continued lower following their 2022 surge amid strong production from renewable sources, mild weather, an improved ability to receive Liquefied Natural Gas (LNG) to replace pipelined gas from Russia, and not least weaker industrial demand. </span></p> </div></div></div><div class="article-image"><img alt="21olh_2023c" src="https://www.home.saxo/-/media/content-hub/images/2023/december/21olh_2023c.png"/></div><div class="article-additional-rte"><div class="rte--output"><h3 class="article-heading--3"><span>Gold</span></h3> <p><span>Gold, up around 12% on the year after trading within a wide 330 dollar range, delivered a somewhat surprisingly robust performance, driven by continued central bank demand and retail buyers in Asia, in the process more than offsetting continued selling from investors focusing on sharply higher real yields and the rising funding cost of holding a position amid the continued rise in US short-term interest rates. It is, however, worth noting that the bulk of the gain was realized during Q4 when central banks finally indicated the next move in rates would likely be lower. </span></p> <h3 class="article-heading--3"><span>Copper</span></h3> <p><span>A 12% slump in the Bloomberg Industrial Metal index was primarily driven by weakness in nickel, zinc and aluminum, and only partly offset by gains in tin and not least copper which gained 5% amid surprisingly strong demand in China, not least from the green transition given its usage in multiple applications. As the year comes to a close, the copper market has found support from multiple short- and long-term supply disruptions, and together with already low inventory levels, potential restocking from industrial users as funding costs come down, we are likely to see continued support in 2024.</span></p> <h3 class="article-heading--3"><span>Crude oil</span></h3> <p><span>Brent spent the year trading in a relatively small 27.5 dollar range compared with the 64 dollar range seen in 2022 when the war in Ukraine drove the market sharply higher, before collapsing. At the current price of around $80, it trades just a couple of bucks below the average for the year, and this relatively small range can be credited to OPEC+ and its attempt to maintain stable prices through actively managing supply. There is no doubt, however, that the group would like to see prices higher but rising production from the US and Iran among others, together with Q4 demand weakness, has left the group with only with a half victory given the failure to boost prices while surrendering market share. </span></p> <h3 class="article-heading--3"><span>Hedge funds remain cautious ahead of 2024</span></h3> <p><span>Continued selling since October by hedge funds and commodity trading advisors (CTA) has resulted in the net long position across 24 major commodity futures collapsing to levels last seen at the depths of the Covid crisis in early 2020 when global demand for commodities, especially fuel, fell off a cliff. </span></p> <p><span>These developments highlight an increasingly under-owned asset class which has struggled in 2023 amid growth worries in China and the wider world, and a sharp rise in funding costs leading industries to reduce excess inventories. It also highlights a sector which, given the right circumstances, may see a strong recovery in 2024 once the technical and/or fundamental outlook becomes more supportive, thereby leading to fresh buying and short covering. Drivers that may trigger such a change could be rate cuts lowering the funding costs and with that the inherent contango leading to industry restocking of inventories, OPEC maintaining a tight control of the supply of crude oil, and not least signs of tightness across key commodities that will help offset the risk of an economic slowdown across key economies.&nbsp; </span></p></div></div><div class="article-image"><img alt="21olh_2023d" src="https://www.home.saxo/-/media/content-hub/images/2023/december/21olh_2023d.png"/></div><div class="article-additional-rte"><div class="rte--output"><hr /> <p><span><strong>Commodity articles:</strong></span></p> <p><span>19 Dec 2023: <a href="https://www.home.saxo/content/articles/commodities/crude-and-gas-pop-on-red-sea-disruption-risk-19122023">Crude and gas pop on Red Sea Disruption Risks</a><br /> 14 Dec 2023:&nbsp;</span><span><a href="https://www.home.saxo/content/articles/commodities/feds-dovish-tilt-adds-fresh-fuel-to-precious-metals-14122023"><strong><span>Fed's dovish tilt adds fresh fuel to precious metals</span></strong></a><br /> </span><span >13 Dec 2023:&nbsp;</span><span ><a href="https://www.home.saxo/content/articles/thought-starters/why-gold-may-enjoy-a-santa-rally-for-the-7th-year-in-a-row-13122023"><strong>Video - Why gold may enjoy a Santa rally for the 7th year in a row</strong></a><br /> </span><span >12 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/uranium-12122023" ><strong>Video - Investing in Uranium</strong></a><br /> <span >1 Dec 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---1-dec-2023-01122023" >Commodity weekly: Tight supply risks boost copper; OPEC+ struggles to control crude</a><br /> <span >30 Nov 2023: </span><a href="https://www.home.saxo/content/articles/commodities/precious-metals-take-top-spot-for-a-second-month-30112023" >Precious metals take top spot for a second month</a><br /> <span ></span><span >23 Nov 2023: </span><a href="https://www.home.saxo/content/articles/commodities/a-nervous-crude-oil-market-awaits-opecs-next-move-23112023" >A nervous crude oil market awaits OPEC's next move</a><br /> <span >23 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/podcast/podcast-23-nov-2023---commodities-23112023" >Podcast: Will Santa deliver another golden gift</a><br /> <span >22 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/will-gold-and-silver-see-another-santa-rally-22112023" >Will gold and silver see another Santa rally</a><span >?<br /> </span><span >17 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---17-november-2023-17112023" >Commodity weekly: Crude overshoots; silver the comeback kid</a><br /> <span ></span><span >16 Nov 2023: </span><a href="https://www.home.saxo/content/articles/podcast/podcast-16-nov-2023---commodities-16112023" >Podcast: Silver comeback, watch OPEC as crude oil slides lower</a><br /> <span >16 Nov 2023: </span><a href="https://www.home.saxo/content/articles/commodities/crude-oil-weakness-adds-focus-to-upcoming-opec-meeting-16112023" >Crude oil weakness adds focus to upcoming OPEC meeting</a><br /> <span >15 Nov 2023: </span><a href="https://www.home.saxo/content/articles/commodities/soft-cpi-lifts-gold-and-beaten-down-silver-and-platinum-15112023" >Soft CPI lifts gold and beaten down silver and platinum</a><br /> <span >12 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/copper-update---21-november-2023-21112023" >Copper supported by green transformation demand and peak rate speculation</a><span >&nbsp;<br /> </span><span >10 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/commodity-weekly---10-november-2023-10112023" >Commodity weekly: Crude oil risks overshooting the downside</a></p> <p><strong >Previous "Commitment of Traders" articles<br /> <br /> 18 Dec 2023:&nbsp;</strong><span ><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---18-dec-2023-18122023">COT: Crude long hits 12-year low ahead of FOMC bounce</a><br /> </span><span >11 Dec 2023:&nbsp;</span><span ><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---11-dec-2023-11122023"><strong>COT: An underowned commodity sector raising risk of an upside surprise in 2024</strong></a><br /> </span><span >4 Dec 2023: </span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---04-dec-2023-04122023" >COT: Speculators add further fuel to gold rally</a><br /> <span >20 Nov 2023:&nbsp;</span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---20-nov-2023-20112023" >COT: Crude selling slows, grains in demand</a><br /> <span >14 Nov 2023: </span><a href="https://www.home.saxo/content/articles/commodities/cot-on-forex-and-commodities---14-nov-2023-14112023" >COT: Crude long slumps; agriculture sector in demand</a></p></div></div><div><a href="https://www.home.saxo/insights/news-and-research/authors/ole-hansen"><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/content-hub/images/general/author-profile-pictures/ole-hansen-400x400.png?mw=48" alt="Ole Hansen" /><div>Ole Hansen</div><div>Head of Commodity Strategy</div><div>Saxo Bank</div></a></div><div ><b>Topics:</b> <a href="https://www.home.saxo/insights/news-and-research/commodities">Commodities</a> <span>Gold</span> <span>Silver</span> <span>Inflation</span> <span>Federal Reserve</span> <span>Gas Oil</span> <span>Crude Oil</span> <span>Heating Oil</span> <span>Oil and Gas</span> <span>Oil</span> <span>Copper</span> <span>Agriculture</span> <span>China</span> <span>Highlighted articles</span> <span>Wheat</span> <span>Natural Gas</span> <span>Commodities Weekly</span> <span>Commodities</span></div>Thu, 21 Dec 2023 12:30:00 Z2024-03-27T10:51:32Z