Natural gas is still flirting with $4.00 as hedge funds are starting to realize that a major bottom may have been formed. According to CFTC data the net long position held by money managers hit a three-year high.
Investors increased wagers on a commodity rally by the most in eight months as signs of a U.S. economic recovery bolstered the outlook for demand and drove rallies in crude oil, cotton, copper and gold.
Hedge funds cut bets on a commodity rally to a four-year low on signs of surplus supply in everything from coffee to zinc before Goldman Sachs Group Inc. said prices had fallen too far and investors should buy.
Back on Jan. 7 I wrote about Cotton in Market Pulse saying the COT is signaling for higher prices. Back then March 2013 cotton had closed the week at 75.05. So what has happened over the past 2-months?
Investors cut wagers on a rally for commodities to the lowest in almost four years and pulled a record $4.23 billion from funds last week as prices erased this year’s gain on a slowdown for manufacturing in China.