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Hedge Funds bet on commodities

By   /   February 24, 2014  /   No Comments

Reuters reported in New York this week that there have been the highest numbers of fund betting on gold and crude oil, which rallied, at the highest rates since 2011, meaning a bullish attitude among commodity traders.

As well as gold, petroleum, natural gas and soybeans experienced large scale gains in mid-February according to research undertaken by the Commodity Futures Trading Commission.

Reuters calculated that the bullish fund held by hedge funds and other speculators across the U.S. commodity markets rose to $119.5 billion compared to $102 billion in the previous week.

Hedge Funds bet on commodities

Hedge Funds bet on commodities

This figure represents the highest number of commodity bets since August 2011, according to the same researchers, and coincides with a wider growth in commodity markets over the last year.

Over the last year, major raw material indexes have recorded a decoupling of commodities from stock markets and foreign exchange rates, meaning their future is now independent, ending a five-year period of direct correlation which began shortly after the financial crisis.

Gold is still the main market for bullish commodities action, accounting for $2.9 billion or 21 percent of the weekly increase of $13.5 billion in managed money net longs.

U.S. gold is usually used as a measure of market liquidity, and a rise of nearly 7 percent signals positive signs for the future.

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