Via ANCAPS: Record sell-off in commodities

Subject: Via ANCAPS: Record sell-off in commodities Mon Aug 15, 2011 5:44 am

The extent of the panic that gripped financial markets last week has been laid bare by figures that showed speculators slashed their bets on commodities by record margins.

Positions were cut by $21 billion during the week to August 9, the biggest sell-off since records began in early 2010.

Bets against the dollar also fell by the most on record - since November 2003 - as demand for US Treasuries soared and investors headed for the safety of the greenback. Traders are betting the dollar will appreciate versus the euro for the first time in seven months.

The calculations were made by Reuters, based on the US Commodity Futures Trading Commission’s weekly Commitment of Traders report.

Excluding some $6 billion of profit-taking in US gold futures and options, managed-money funds - such as hedge funds and proprietary traders - cut their overall net long holdings in 21 other commodities by around $15 billion.

The total value of long positions came to $93 billion, the lowest level in five weeks.Although an imperfect gauge, the data - based on futures and options positions - captures most of the recent rout in global risk assets, as gloomy economic indicators and a downgrade of the US debt rating triggered a crisis of confidence.

Despite risk aversion gripping the financial community, big funds were more sellers than buyers of gold - traditionally perceived as a safe haven - as prices fluctuated. Traders sold off $6 billion of bullish bets on the market after their net long positions had reached a record high in the previous week.

Soybeans suffered the second-biggest liquidation with $3 billion of net selling by funds. As oil prices suffered their worst five-day run since early 2009, speculators cut their Nymex crude oil position by more than 10 per cent.

Despite the fund exodus, many analysts saw little reason to expect bulls to continue to abandon the sector.

While traders were selling off their bullish gold bets, the market turmoil has proved a boon for sellers of the yellow metal on eBay.

Activity on the area of the webside dedicated to selling gold and silver has intensified as customers flocked to gold. Sales of one ounce gold coins and bars rose steadily from August 5 to last Wednesday.

http://www.smh.com.au/business/record-selloff-in-commodities-20110815-1iucc.html

Via ANCAPS: Record sell-off in commodities

Via ANCAPS: Record sell-off in commodities

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