Hedge funds turned record short on metals just before the rout

Commodity markets have gone haywire — and hedge funds with picture-perfect timing are set to rake in stellar profits.
As U.S.-China trade tensions escalated mid-June, fast-money traders flipped to a short position in metals overall, subsequently extending bearish wagers to a record coming into the maelstrom of the past few days.
Hedge funds’ net position stood at a negative 51 percent in precious metals and negative 37 percent in base metals as of Tuesday, according to Credit Suisse Group AG prime services.
Never before have the metals in aggregate been shorted to this degree show the data, which captures client exposures to commodity futures and exchange-traded funds since 2010.
The bet has proved prescient. Gold fell to its lowest price since January 2017 this week amid dollar strength, while industrial metals posted their biggest one-day tumble in nearly seven years as negative sentiment in China and Turkey fueled a global risk-off.
“It was very unique to have both shorts at these levels, and obviously profitable,” said Mark Connors, head of risk advisory at the Swiss bank.
Hedge funds and other large speculators held a record 63,282 net contracts shorting gold futures and options, according to Commodity Futures Trading Commission data.
Base metals pared some losses at the end of the week, a bounce attributed to signs of thawing trade tensions. Copper futures gained 2.2 percent on Thursday after their worst one-day sell-off in over three years.
Yet the recovery could prove a head-fake, if it’s been exacerbated by smart-money traders taking profit from shorts that would have paid off handsomely amid the carnage.
“This certainly can be a short-lived tactical move by funds in base metals,” said Connors.
(By Dani Burger).
More News
Ukraine rejects US bid for 50% of rare earth minerals, FT says
Zelenskiy wants US and European security guarantees to be tied directly to any deal on the mineral reserves, FT reports.
February 16, 2025 | 08:53 am
Jubilee Metals begins processing high-grade copper to recoup production
The milestone follows Jubilee's recent agreement to secure 200,000 tonnes of material with a copper content of around 1.6% for its Roan facility.
February 16, 2025 | 08:25 am
Over 40 people killed in Mali mine collapse
The accident took place near the town of Kenieba in Mali's gold-rich Kayes region.
February 16, 2025 | 08:22 am
Trump starts energy dominance drive with White House council
The new National Energy Dominance Council will be led by Interior Secretary Doug Burgum.
February 15, 2025 | 01:58 pm
{{ commodity.name }}
{{ post.title }}
{{ post.excerpt }}
{{ post.date }}
Comments