Latest news with #BloombergCommoditiesIndex
Mid East Info
26-05-2025
- Business
- Mid East Info
COT Report: Hedge funds return to gold; elevated grains short ahead of key season
Ole Hansen, Head of Commodity Strategy, Saxo Bank Commodities The latest COT reporting week to 20 May captured the aftermath of the announced 90-day US–China trade truce, which included a temporary reduction in tariffs. While the news supported additional gains across global stock markets and renewed USD weakness, the commodities sector traded in a very mixed fashion—resulting in a 1% drop in the Bloomberg Commodities Index. This was driven by weakness across most sectors, except precious metals and grains. The managed money group of traders, tracked in this update, responded with limited enthusiasm. This was partly due to the current lack of clear trends across several major commodities, many of which have experienced volatile but rangebound trading—conditions that tend to reduce appetite for large-scale, one-directional bets. One of the few exceptions was the grains sector, where traders held the biggest net short position across soybeans, corn, and wheat in nine months—and the highest for this time of year in six years—just ahead of the important growing season, during which weather developments often have a significant impact on market performance. In energy, a rangebound crude oil market saw net selling of WTI offset by demand for Brent, keeping the total net long near a six-week high at 245k contracts. Despite trading lower on the week, demand for the NY diesel contract jumped, resulting in the first—albeit small—net long in two months. Hedge funds turned net buyers of gold for the first time in ten weeks, during which the net long had slumped to a 15-month low at 111k contracts—a 52% reduction since January. Renewed demand was supported by signs that the month-long correction had run its course, after prices rallied back above USD 3,200 per ounce. Meanwhile, a small amount of net silver buying paled in comparison with platinum, which—together with palladium—surged after finally breaking through key levels of resistance. The platinum position flipped back to a 6.2k long, while the net short in palladium was reduced by 27%. Overall, a sustained rally will force additional demand from wrong-footed short sellers, and those rebuilding longs. Note, in the past five years, when platinum traded mostly sideways, several periods of demand saw the platinum net long peak between 20k and 25k contracts. Across the agriculture sector, the main focus was once again on the grains segment, which—except for wheat—saw broad net selling from funds during a week where the Bloomberg Grains Index overall showed a 1.6% gain. This lifted the net short across the three major crop futures to 330k contracts—a nine-month high, and the highest for this time of year in six years. Managed money speculators are pricing in almost no weather or logistics risk premium as we enter the critical US summer growing season. Forex The latest reporting week to 20 May covered an extended risk-on period across markets following the US-China decision to lower tariffs for 90 days. However, while these developments saw renewed and broad US dollar weakness, the focus among speculators—wrongly as it turned out—pointed in the opposite direction, with naked short bets rising across all the eight IMM forex futures covered in this update, overall leading to a 27% reduction in the gross US dollar short to USD 12.4 billion. The bulk of selling against the US dollar was led by CAD (–21.7k or USD 1.6 billion equivalent) and euros (–10.3k or USD 1.5 billion equivalent), followed by AUD and JPY. In the days that followed the reporting period, the greenback saw fresh weakness amid fiscal debt concerns and renewed tariff focus after Trump vented his anger against the EU and Apple, culminating in early Monday trading when the Bloomberg Dollar Index hit a December 2023 low.
Gulf Today
03-04-2025
- Business
- Gulf Today
Tariff-related fears ignite commodities selloff
Inayat-ur-Rahman, Business Editor US President Trump has imposed the steepest and harshest American tariffs in a century on all its major counterparts, sparking threats of retaliation and a broad selloff around the world on concerns that a global trade war on this scale and magnitude will drive an economic slowdown — not least in the US, where inflation forecasts have spiked, and sentiment among consumers and businesses has fallen sharply during the past couple of months. This was stated by Ole Hansen, Head of Commodity Strategy, Saxo Bank, during an exclusive interview with Gulf Today. 'There is a general understanding of why Trump wants to reshape the global economy, with his primary goal being the reversal of a two-decade trend of US companies moving production overseas to capitalise on cheaper labour costs, which, in turn, has boosted their stock prices but contributed to domestic job losses and economic stagnation in certain sectors and parts of the nation.' Ole added. 'This shift has had significant impacts on American manufacturing and the broader economy, as well as its ability to be self-sufficient in key materials.' Economic implications: short-term pain, long-term uncertainty: 'However, it is crucial to recognise that reversing such long-standing trends is a complex and time-consuming process. It cannot be achieved overnight — let alone in four years — and will inevitably involve trade-offs and temporary setbacks for both the US and its trading partners. What Trump delivered on this so-called 'Liberation Day' was an economic war declaration likely to cause chaos across global supply chains, while in the short term raising the risk of an economic fallout, hurting demand for key commodities, with energy and industrial metals being the sectors most at risk. Financial markets responded strongly to the tariff announcement, with the USD, equity markets, and US Treasury yields all seeing sharp declines.' Energy and industrial metals among the hardest hit 'Commodities suffered broad declines, with the Bloomberg Commodities Index trading down around 1.2% since Monday, with losses led by the growth- and demand-dependent sectors of energy and industrial metals. 'At this stage, however, the weakness has not triggered any major technical breakdown, potentially limiting selling pressures from momentum-focused traders. In addition, the USD trades sharply lower, and together with rising inflation expectations, the risk of a major correction seems limited at this stage. 'Metals tariffs were largely left unchanged, with steel and aluminium at 25%, and no tariff yet on copper while the Section 232 investigation continues. Prices nevertheless fell, with growth risks weighing on prices — not least in China, the world's top exporter and consumer of raw materials — as it faces tariffs of at least 54%, with the threat of another 25% on top for buying Venezuelan oil.' HG copper futures in New York briefly slumped to $4.825 before stabilising around $4.935, with the tariff-related premium over LME prices in London still elevated around 13%, highlighting a market where trades — as opposed to a deflated premium in gold and silver — still expect tariffs to be introduced. However, uncertainty about the level of tariffs will continue to create a great deal of volatility in the COMEX-LME spread. Gold's haven credentials on display despite deleveraging risks Gold trades a tad softer on the day after briefly hitting a fresh record high overnight at $3,167 — a move that was supported by geopolitical and economic tensions, as well as the weaker USD and rising inflation expectations driving down US real yields. However, while these supportive factors will continue to underpin bullion prices, a current rush to deleverage amid spiking volatility will also be felt in gold — not least given its recent record run of gains. What will determine the depth of a potential correction hinges on the investor base, and a battle between short-term, technical-focused traders and long-term accumulators from real money allocators, high-net-worth individuals, and central banks. Given how far gold has travelled in the past three months, a correction to $3,000 — let alone $2,960 — would not trigger any major alarm bells. Silver slump as COMEX tariff premium evaporates Silver and platinum, two semi-industrial metals, have both suffered sharp corrections once again as wrong-footed longs head for the exit. The weakness has been led by selling in the New York futures market after a fact sheet distributed by the White House stated that bullion (gold) and 'other certain minerals that are not available in the United States' should not be subject to reciprocal tariffs.
Mid East Info
03-04-2025
- Business
- Mid East Info
Tariff-related recession fears ignite widespread commodities selloff – Saxo Bank MENA - Middle East Business News and Information
– Ole Hansen, Head of Commodity Strategy, Saxo Bank US President Trump has imposed the steepest and harshest American tariffs in a century on all its major counterparts, sparking threats of retaliation and a broad selloff around the world on concerns that a global trade war on this scale and magnitude will drive an economic slowdown—not least in the US, where inflation forecasts have spiked, and sentiment among consumers and businesses has fallen sharply during the past couple of months. There is a general understanding of why Trump wants to reshape the global economy, with his primary goal being the reversal of a two-decade trend of US companies moving production overseas to capitalise on cheaper labour costs, which, in turn, has boosted their stock prices but contributed to domestic job losses and economic stagnation in certain sectors and parts of the nation. This shift has had significant impacts on American manufacturing and the broader economy, as well as its ability to be self-sufficient in key materials. Economic implications: short-term pain, long-term uncertainty However, it is crucial to recognise that reversing such long-standing trends is a complex and time-consuming process. It cannot be achieved overnight—let alone in four years—and will inevitably involve trade-offs and temporary setbacks for both the US and its trading partners. What Trump delivered on this so-called 'Liberation Day' was an economic war declaration likely to cause chaos across global supply chains, while in the short term raising the risk of an economic fallout, hurting demand for key commodities, with energy and industrial metals being the sectors most at risk. Financial markets responded strongly to the tariff announcement, with the USD, equity markets, and US Treasury yields all seeing sharp declines. Energy and industrial metals among the hardest hit Commodities suffered broad declines, with the Bloomberg Commodities Index trading down around 1.2% since Monday, with losses led by the growth- and demand-dependent sectors of energy and industrial metals. At this stage, however, the weakness has not triggered any major technical breakdown, potentially limiting selling pressures from momentum-focused traders. In addition, the USD trades sharply lower, and together with rising inflation expectations, the risk of a major correction seems limited at this stage. Metals tariffs were largely left unchanged, with steel and aluminium at 25%, and no tariff yet on copper while the Section 232 investigation continues. Prices nevertheless fell, with growth risks weighing on prices—not least in China, the world's top exporter and consumer of raw materials—as it faces tariffs of at least 54%, with the threat of another 25% on top for buying Venezuelan oil. HG copper futures in New York briefly slumped to USD 4.825 before stabilising around USD 4.935, with the tariff-related premium over LME prices in London still elevated around 13%, highlighting a market where trades—as opposed to a deflated premium in gold and silver—still expect tariffs to be introduced. However, uncertainty about the level of tariffs will continue to create a great deal of volatility in the COMEX-LME spread. Gold's haven credentials on display despite deleveraging risks Gold trades a tad softer on the day after briefly hitting a fresh record high overnight at USD 3,167—a move that was supported by geopolitical and economic tensions, as well as the weaker USD and rising inflation expectations driving down US real yields. However, while these supportive factors will continue to underpin bullion prices, a current rush to deleverage amid spiking volatility will also be felt in gold—not least given its recent record run of gains. What will determine the depth of a potential correction hinges on the investor base, and a battle between short-term, technical-focused traders and long-term accumulators from real money allocators, high-net-worth individuals, and central banks. Given how far gold has travelled in the past three months, a correction to USD 3,000—let alone USD 2,960—would not trigger any major alarm bells. Silver slump as COMEX tariff premium evaporates Silver and platinum, two semi-industrial metals, have both suffered sharp corrections once again as wrong-footed longs head for the exit. The weakness has been led by selling in the New York futures market after a fact sheet distributed by the White House stated that bullion (gold) and 'other certain minerals that are not available in the United States' should not be subject to reciprocal tariffs. With silver and platinum imports accounting for the bulk of US consumption, traders concluded that these two metals would not be impacted, and with that, the tariff premium on futures prices in New York compared with spot prices in London has seen a sharp contraction. A 51% year-to-date increase in silver flows to COMEX-monitored vaults now faces the risk of a partial reversal, potentially adding supply to a market already weakened by short-term recession concerns. Agricultural commodity slump led by cotton Cotton futures fell 4.4% on the opening—the maximum daily move allowed by the exchange—following the announcement of US tariffs. The fibre is often used as a barometer of global growth because its demand is closely linked to the health of the global economy, with consumers often cutting back on clothing during an economic downturn. With losses seen across the grains and soybean sectors in anticipation of a reaction from China, a major buyer of both crops, adverse weather conditions in Brazil are once again supporting Arabica coffee, while cocoa has surged due to expectations of a smaller-than-expected mid-crop harvest in West Africa.
Khaleej Times
31-03-2025
- Business
- Khaleej Times
Commodity prices show strength in the first quarter
The commodities sector has emerged as one of the best-performing asset classes this year, research shows. The Bloomberg Commodities Index, which tracks the total return of 24 major futures markets, spread close to evenly between energy, metals, and agriculture, has traded up 12.2 per cent in the past twelve months, with the bulk of that gain being achieved within the last three months. The year-to-date return shows a 7.9 per cent gain, well above the return seen on some of the major equity market indices. On a sector level, precious and industrial metals stand out, having delivered returns this quarter of 15.2 per cent and 12.5 per cent, respectively, while the 12-month performance is even more impressive at 37.6 per cent and 18.1 per cent. This has been driven by continued haven demand for gold (+14.7 per cent) and silver (+16.7 per cent) amid ongoing demand from investors seeking protection in tangible assets against geopolitical and economic uncertainties, as well as central bank purchases of gold to reduce their dependency on fiat currencies, especially the dollar. The industrial metals sector shows a clear distinction between New York-traded HG copper and those traded and tracked by futures contracts on the London Metal Exchange. The HG copper contract has surged to a record high on speculation that Trump may implement tariffs on imports within weeks. The premium HG copper trades over London has reached 17 per cent, helping to explain the major contribution of industrial metals to the BCOMTR — a sector that otherwise would struggle amid global growth concerns. The energy sector has mostly been a story about natural gas strength, with a total return so far this year of around 25.5 per cent, while crude and fuel products have struggled amid a tug-of-war between economic growth concerns impacting demand and the increased threat of sanctions potentially reducing supply from Iran and Venezuela. 'This has, in turn, offset a planned OPEC+ production increase from next month,' Ole Hansen, Head of Commodity Strategy, Saxo Bank, wrote in a report. Finally, the agriculture sector has delivered a small return of 2.2 per cent, with broad losses across an amply supplied grain and soybean complex partly offsetting gains in softs and livestock. Standout performances have come from Arabica coffee and sugar and, to a certain extent, live cattle. Looking at the performances and individual weights, it can be seen that gold, copper, and natural gas have delivered close to 75 per cent of the total return, despite the three contracts only carrying a total index weight of 27.5 per cent. 'This highlights the advantage of holding broad exposure to commodities instead of trying to pick individual winners,' Hansen said. Hansen identifies seven megatrends that are likely to push the commodities market this year upwards: ● Deglobalisation: The US-China rivalry is reshaping supply chains, prioritising security over cost, and increasing demand for critical resources. ● Defence: Rising geopolitical tensions are fuelling record military spending and stockpiling of key materials. ● Decarbonisation and power demand: Investments in renewables, EVs, AI, and data centers are driving demand for metals and energy. ● De-dollarisation: A shift from US dollar reliance is boosting gold purchases as a financial hedge. ● Debt and fiscal risks: High global debt and deficits are increasing demand for hard assets like gold and silver. ● Demographics & urbanisation: Ageing Western populations and growing emerging economies are driving resource demand. ● Climate change: Higher power needs for cooling, food security concerns, and protectionism 'So far this millennium, we have witnessed three major commodities bull cycles, the biggest being the China-led rally from 2002 to 2008, followed by the pandemic- and Ukraine war-led spike between 2020 and 2022. In the past three years, the index has traded mostly sideways before making a renewed upside attempt within the past couple of months,' Hansen said.
Mid East Info
27-03-2025
- Business
- Mid East Info
Commodities show strength in Q1, led by a select few – Saxo Bank MENA - Middle East Business News and Information
Ole Hansen, Head of Commodity Strategy, Saxo Bank The commodities sector has emerged as one of the best-performing asset classes this year, and as the first quarter moves to a close, and a 2nd April tariff announcement from the Trump administration looms, let's take a look at the winners and losers so far. In order to do so, we focus on our preferred index, the Bloomberg Commodities Index, which tracks the total return of 24 major futures markets, spread close to evenly between energy, metals, and agriculture. The index, which is tracked by several major ETFs, trades up 12.2% in the past twelve months, with the bulk of that gain being achieved within the last three months. The year-to-date return shows a 7.9% gain, well above the return seen on some of the major equity market indices. Metals: The standout performers On a sector level, precious and industrial metals stand out, having delivered returns this quarter of 15.2% and 12.5%, respectively, while the 12-month performance is even more impressive at 37.6% and 18.1%. This has been driven by continued haven demand for gold (+14.7%) and silver (+16.7%) amid ongoing demand from investors seeking protection in tangible assets against geopolitical and economic uncertainties, as well as central bank purchases of gold to reduce their dependency on fiat currencies, especially the USD. The industrial metals sector shows a clear distinction between New York-traded HG copper and those traded and tracked by futures contracts on the London Metal Exchange. The HG copper contract has surged to a record high on speculation that Trump may implement tariffs on imports within weeks. The premium HG copper trades over London has reached 17%, helping to explain the major contribution of industrial metals to the BCOMTR—a sector that otherwise would struggle amid global growth concerns. Energy: Natural gas takes the lead The energy sector has mostly been a story about natural gas strength, with a total return so far this year of around 25.5%, while crude and fuel products have struggled amid a tug-of-war between economic growth concerns impacting demand and the increased threat of sanctions potentially reducing supply from Iran and Venezuela. This has, in turn, offset a planned OPEC+ production increase from next month. Agriculture: Modest gains with mixed results Finally, the agriculture sector has delivered a small return of 2.2%, with broad losses across an amply supplied grain and soybean complex partly offsetting gains in softs and livestock. Standout performances have come from Arabica coffee and sugar and, to a certain extent, live cattle. Key takeaways: The power of broad exposure Looking at the performances and individual weights, we find that gold, copper, and natural gas have delivered close to 75% of the total return, despite the three contracts only carrying a total index weight of 27.5%. This highlights the advantage of holding broad exposure to commodities instead of trying to pick individual winners. Mega-trends to drive long-term gains In our opinion, the long-term trend for key commodities remains upward, driven by several major themes or mega-trends, and they highlight why we believe a broad approach is the best option for long-term gains: Deglobalisation: The US-China rivalry is reshaping supply chains, prioritising security over cost, and increasing demand for critical resources. Defence: Rising geopolitical tensions are fuelling record military spending and stockpiling of key materials. Decarbonisation and power demand: Investments in renewables, EVs, AI, and data centers are driving demand for metals and energy. De-dollarisation: A shift from US dollar reliance is boosting gold purchases as a financial hedge. Debt and fiscal risks: High global debt and deficits are increasing demand for hard assets like gold and silver. Demographics & urbanisation: Ageing Western populations and growing emerging economies are driving resource demand. Climate change: Higher power needs for cooling, food security concerns, and protectionism So far this millennium, we have witnessed three major commodities bull cycles, the biggest being the China-led rally from 2002 to 2008, followed by the pandemic- and Ukraine war-led spike between 2020 and 2022. In the past three years, the index has traded mostly sideways before making a renewed upside attempt within the past couple of months. For more information, please visit .
