(Bloomberg) — Hedge funds put money into bets that the 2021 commodities rally should run even further, aborting three consecutive weeks of cuts.
Net long positions on a basket of 20 commodities rose 8.3% in the week ended Tuesday, according to US Commodity Futures Trade Commission data collected by Bloomberg. Investors have been betting on further price increases for commodities, including crude oil, natural gas, corn and copper, while cutting those for platinum and soybeans.
The best commodities rally since 2016 has lost some of its momentum in recent weeks, amid speculation that the Federal Reserve may soon scale back its massive bond purchases to fight inflation, while the spread of the Delta variant of Covid-19 worries has suggested that demand may not remain as strong going forward. Still, tighter inventories of some commodities helped push prices close to multi-year highs.
The Bloomberg Commodity Spot Index, which tracks 23 commodities, gained 1.5% in July and is near its highest level since 2011.
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