COT Report: Mixed week in commodities
London, November 25, 2024, (Oilandgaspress) –––In the latest reporting week, the Bloomberg Commodity Index rose by 1.2%, with gains led by the energy sector, where crude and fuel products all rose. This was followed by precious metals, where prices for platinum and palladium recovered strongly, and gold stabilised ahead of a week that ended with the strongest weekly gain in 20 months. This gain was driven by fresh momentum buying supported by escalating tensions between Russia and the West. The agriculture sector traded mixed, with strong weather-related gains in cocoa and coffee offset by renewed selling across the soybean complex as well as cotton.
The response to these price developments from managed money accounts was relatively muted, with the overall exposure across the 27 major futures contracts tracked showing a small reduction. On an individual level, the strongest demand was seen in Brent, gas oil, gasoline, silver, cocoa, and coffee, while selling was concentrated in gold, soybeans, and cotton.
Today in Asia, markets responded with a risk-on move that saw the dollar and US Treasury yields trade lower and stocks move higher after US President-elect Donald Trump chose hedge fund billionaire Scott Bessent as Treasury Secretary. Bessent is known as a fiscal hawk and has advised Trump to create a “3-3-3″ policy, including cutting the budget deficit by 3% of GDP by 2028, pushing GDP growth to 3% via deregulation, and pumping an extra 3 million barrels of oil per day. He has also expressed that tariffs should be used more as a negotiating tool and implemented gradually.
Commodities saw a mixed reaction to the news, with gold suffering a steep drop on reduced concerns about the US debt situation, thereby squeezing recently established long positions. Crude traded lower after Israel said it was nearing a ceasefire agreement with Hezbollah, while industrial metals traded higher, supported by a weaker dollar and Bessent’s more moderate views on tariffs.
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