Hedge funds and speculators remained positive on commodities over the new year, increasing bullish bets in metals and oil.
The net long position in Comex gold futures and options – the difference between bets on rising and falling prices jumped almost 40 per cent to 152,650 contracts, according to exchange data, while palladium hit a record 27,128 contracts.
Elsewhere, silver flipped from a net short to a net long of 16,006 contracts after funds slashed bearish bets. Both gold and silver have enjoyed a strong run over the past three weeks, helped by a weak US dollar, which makes metals cheaper in foreign currencies.
Surveys showing strong manufacturing activity have helped boost palladium, a metal that is used to curb harmful emissions from gasoline, or petrol-powered vehicles.
In oil, the net long position in Brent, the global crude marker, crept up to a record high of 565,459 contracts – or more than half a billion barrels of oil. Combined with West Texas Intermediate, the US oil benchmark, speculators have amassed bullish bets over 1bn barrels of crude.
In addition, money managers boosted their net long position in heating oil to a record 91,515 contracts, oR 92m barrels. Very cold weather across the US north-east has increased demand for heating oil.
Commodities have enjoyed a good start to 2018 with the Bloomberg Commodities Spot Index hitting its highest level in three years amid optimism about the strength of the global economy and the weakness of the US dollar.
Source: FT.com
