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Jenna Cutly
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Market Analyst
Market Analyst

289 followers
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Are Hedge Funds Trading the Weather Markets?
 
I don't normally cover soft #commodities and I'm certainly no agricultures specialist but the latest Commitment of Traders (COT) report makes for interesting reading.
 
In the table below, I've shown a number of key agricultures markets. As you can see, with the exception of 'Live Cattle', the 'Non-Commercial commitments' have increased across the board.
 
(If you are not familiar with the US Gov COT reports, 'Non-Commercial commitments' are positions taken by big speculators like Hedge Funds).
 
Perhaps the hedge funds think that the unusual global weather patterns are here to stay for the current season(s) and therefore prices will rise.
 
With parts of Brazil seeing little rainfall, we've certainly seen some sharp rises in #coffee #futures over the last couple of weeks.
 
I haven't traded yet but it's not difficult to see seemingly random the global weather systems wreaking havoc with harvests.
 
Perhaps the hedgies are right on this one.
 
Having said that, I'm not sure how much of the poor weather is already priced into the markets.
 
Note, these views are my own and not a recommendation to trade. If you are trading, only trade with money you can afford to lose. Good luck!
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Hedge Funds Continue to Buy into Metals
 
The table below shows the latest weekly positions by the hedge funds, i.e. Non-Commercial Traders, up to 18 Feb 2014.
 
Only a few weeks ago, for the report to 28 Jan, these big speculators were around 7:1 long of #platinum and nearly 5:1 long of #palladium.
 
So, whilst they have certainly reduced those positions, they are still heavily long.
 
Of more interest though is that the hedgies are now 2.1:1 long of gold and 2.4:1 long of silver.
 
Over the last 7-8 weeks the hedge funds have been slowly, but surely, increasing their #gold and #silver positions.
 
Gold prices have also seen slow and 'relatively' steady rises over the same period (silver hasn't been quite as 'textbook').
 
Sadly, I closed out my last gold position for a small profit, but it was far far too early.
 
Having said that, I am tempted to get back into the market.
 
Note, these views are my own and not a recommendation to trade. If you are trading, only trade with money you can afford to lose. Good luck!
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Hedge Funds Still Buying into Gold

The US offered up their latest Commitment of Traders (COT) report on Friday and it makes interesting reading for precious metals traders.

In the table below we can see the latest positions by the hedge-funds (Non-Commercial commitments) up to 28 Jan 2014.

It looks like the big speculators are still roughly 7:1 long of #platinum and nearly 5:1 long of #palladium .

Gold might be more interesting though.

If we look at a chart for how these Non-Commercial traders have been changing their position on #gold , we can see that they have been increasing their net long position since 3 Dec 2013.

The correlations aren’t perfect but if you’re speculating on gold it’s good to know that the big boys seem to be keen and have increased their positions for each of the last 8 weeks.

(and just to be clear, I have a small long position on gold).

Note, these views are my own and not a recommendation to trade. If you are trading, only trade with money you can afford to lose. Good luck!
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Hedge Funds Still Buying into Gold

The US offered up their latest Commitment of Traders (COT) report on Friday and it makes interesting reading for precious metals traders.

In the table below we can see the latest positions by the hedge-funds (Non-Commercial commitments) up to 28 Jan 2014.

It looks like the big speculators are still roughly 7:1 long of #platinum and nearly 5:1 long of #palladium .

Gold might be more interesting though.

If we look at a chart for how these Non-Commercial traders have been changing their position on #gold , we can see that they have been increasing their net long position since 3 Dec 2013.

The correlations aren’t perfect but if you’re speculating on gold it’s good to know that the big boys seem to be keen and have increased their positions for each of the last 8 weeks.

(and just to be clear, I have a small long position on gold).

Note, these views are my own and not a recommendation to trade. If you are trading, only trade with money you can afford to lose. Good luck!
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Big Traders Stay Long of Crude Oil
 
The US Gov released their latest Commitment of Traders report on Friday evening.
 
For energies investors, it’s interesting to see that the ‘Commitments by Non-Commercial Traders’, i.e. positions by hedge-funds to you and me, are still nearly 4:1 long of #crude #oil.
 
That means there is a lot of upwards pressure on the price of crude oil from these traders.
 
Perhaps they don’t think Iran will be supplying large quantities of crude oil any time soon.
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Coinye West Currency is Getting Serious (for some people)
 
According to an article in the Guardian - http://www.theguardian.com/music/2014/jan/08/kanye-west-bitcoin-coinye-west-trademark - the brains behind the #Coinye West currency have received a cease-and-desist letter from Kanye's lawyers.
 
The name of the currency has now been changed from ‘Coinye West’ to simply ‘Coinye’.
 
Either way, Kanye still seems grumpy. Perhaps he prefers metals over #digital #currencies. Perhaps he is just a Gold Digger.
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Coinye West Currency is Getting Serious (for some people)
 
According to an article in the Guardian - http://www.theguardian.com/music/2014/jan/08/kanye-west-bitcoin-coinye-west-trademark - the brains behind the #Coinye West currency have received a cease-and-desist letter from Kanye's lawyers.
 
The name of the currency has now been changed from ‘Coinye West’ to simply ‘Coinye’.
 
Either way, Kanye still seems grumpy. Perhaps he prefers metals over #digital #currencies. Perhaps he is just a Gold Digger.
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Interesting Moves By Big Traders in the Gold Market

The US Commodities Futures Trading Commission put out their weekly Commitments of Traders (COT) report on Friday evening.

Investors can access this data for free on the US Gov website - http://www.cftc.gov/dea/futures/deacmxsf.htm

The latest report covers the week to 10 December.

OK, it's not the most beautiful report but it makes for interesting reading. I've listed an easier-to-read summary of the main metals markets below.

Why follow these reports? In short, most investors are interested in what the 'Non-Commercial' traders are doing, i.e. the Hedge Funds / big speculators.



Are the Big Gold Traders Changing Their Positions?

The COT report shows 680 fewer 'commitments' (aka contracts) going long and 4,369 fewer commitments going short of gold. 

So the number of long and short positions by big traders fell but the 'Net' Non-Commercial Commitments went up by 3,689.

i.e. on a 'net' basis, the big traders were slightly more bullish of gold than the previous week.

This is important because it breaks the trend that has been in place since the report for 29 October.

Can you place a trade based on this data? Possibly, possibly not. Nevertheless, how the 'big specs' are trading the market should be part of any serious investor's analysis.

There isn't a perfect correlation between the 'Net Non-Commercial Commitments' and the price of gold; nothing in this market is that easy.

However, for the medium-long term trends, the argument is more compelling. We have debated some of the pros and cons here - http://www.cleanfinancial.com/gold_spread_betting.php#gold-cot-report-case-study.

As for the current positioning by the big specs?

This may be a change of direction or just a pause, but it's worth keeping an eye on.

Note, these views are my own and not a recommendation to trade. If you are trading, only trade with money you can afford to lose. Good luck!
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Precious Metals Out of Fashion for the Hedge Funds

Gold continues to drop and the metal looks like its aiming for the next resistance level around $1,200, i.e. just above its 27 June low of $1,180.42.

Is anyone still buying gold?

The new US Government 'Commitment of Traders' reports came out last night and they showed that the big speculators, i.e. hedge funds, are still reducing long positions and increasing short positions.

In the previous report, the 'big specs' were 1.7:1 long of #gold , now they are just 1.2:1 long.

Going further back to the 15 Nov report we can see that the big speculators were 2.6:1 long of the metal. That’s a big change over the space of a few weeks.

In the #silver market it is a similar story, the big specs have gone from 1.5:1 long to 1.2:1 long.

And with #platinum , the big specs have also reduced their view by going from 5:1 long to 2.9:1 long.

It looks like the precious metals are out of fashion.

Looking in more detail though, there are still plenty of traders left in the market and the big specs are still marginally long.

Therefore, we may not have reached the turning point where there are so many people shorting that there’s no one else left to short the market.

So unfortunately the current trend could well continue.

Note, these views are my own and not a recommendation to trade. If you are trading, only trade with money you can afford to lose. Good luck!
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