February 21, 2014 / 11:26 PM / in 4 years

Hedge funds place largest bullish bets on commodities since 2011

By Barani Krishnan
    NEW YORK, Feb 21 (Reuters) - Hedge funds plowed into gold
and crude oil as prices rallied this week, driving the bullish
money wagered by commodity speculators to the highest level
since 2011, data showed on Friday.
    Gasoline, natural gas and soybeans were other commodities
that attracted huge buying during the week that ended Feb. 18,
according to the data from the Commodity Futures Trading
    The net-long or bullish money held by hedge funds and other
speculators across 22 U.S. commodity markets rose to $119.5
billion in the Feb. 18 week from $102 billion during the week to
Feb. 11, Reuters calculations of the CFTC data showed.
    That was the highest in bullish commodity wagers held by
such money managers since at least August 2011, according to a
Reuters database of the CFTC data.
    The gains also coincide with a larger phenomenon evident in
commodity markets over the past year.
    Major raw material indexes, and the commodities they track,
have steadily decoupled from stock markets and foreign exchange
rates over the past 12 months, charting an independent course
that ends a five-year period of unprecedented correlation that
began in the aftermath of the financial crisis. 
    Gold dominated this week's bullish action in commodities,
accounting for $2.9 billion or 21 percent of the weekly increase
of $13.5 billion in managed money net longs. Open interest in
U.S. gold, a measure of market liquidity, rose nearly 7 percent.
    U.S. gold futures, traded on the COMEX division of
the New York Mercantile Exchange, surged to $1,332.40 an ounce
on Feb. 18 after disappointing data cast worries about U.S.
economic growth. That marked a high for the precious metal since
Oct. 31.
    Total net-long money in U.S. crude rose by $2.6 billion,
accounting for 20 percent of the total growth in weekly net
longs of managed money. Open interest in NYMEX crude declined by
2.8 percent.
    U.S. crude on NYMEX rose to $103.25 a barrel on Feb.
18, hitting a peak since Oct. 10 on forecasts for strong winter
    Gasoline saw a jump of $1.8 billion in managed money net
longs; natural gas $1.4 billion and soybeans $1.3 billion.

 (Editing by Lisa Shumaker)
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