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.
Hedge funds cut bets on a rally in gold by the most since 2007 and became the most bearish ever on sugar and coffee as concern that the Federal Reserve will slow U.S. stimulus programs drove prices for raw materials to the biggest loss this year.
Speculators reduced their bets on rising commodities prices by 15% in the week ending Feb. 12, the largest weekly reduction since mid-November. However, the cleaner positioning can prepare the stage for a gold price rebound.