Hedge funds and money managers boosted their copper futures positions to their most bullish since May as rising hopes for monetary stimulus brightened the U.S. economic outlook, while they also boosted their net long position in gold and silver.
Last week marked the first time managed money in copper futures switched to a net long, or bullish, position. The group had been bearish for the past 13 weeks, data from the Commodity Futures Trading Commission’s (CFTC) Commitments of Traders showed.
Copper, an industrial metal widely viewed as a barometer of economic health, benefited from expectations that the Federal Reserve would unveil a new round of bond buybacks, known as quantitative easing, to stimulate the U.S. economy.
In the week up to Aug. 28 covered by the CFTC report, U.S. COMEX copper futures for December delivery breached the $3.50 (U.S.) per pound level for the first time in more than a month.
Copper prices have slipped since then, which might prompt investors to reduce their bullish bets. The price of the metal remains sharply below its 2012 high at over $4 per lb. Concerns about the euro zone debt crisis have crimped demand.
Managed money increased their net longs in copper by 6,484 lots in the week up to Aug. 28, switching the market to a net long of 3,260 lots.
Speculators also increased their bullish bets in gold and silver ahead of a speech by Fed Chairman Ben Bernanke at a meeting of central bankers at Jackson Hole, Wyoming.
The group raised gold’s net longs by 21,063 to 131,687 lots, and they raised silver’s net longs by 8,075 to 25,527 contracts.
The next CFTC report could show that Specs added further net longs in gold and silver.
On Friday, gold surged 2 per cent to a five-month high and looked set to resume its years-long rally after Federal Reserve Chairman Ben Bernanke’s speech.