According to Bloomberg, ``Hedge funds are making the biggest bet in nine months that commodity prices will rise as the global economy rebounds from its steepest slump since World War II.
Adds the Bloomberg article, ``The CHART OF THE DAY shows an index of the net long position in U.S. commodity futures, or bets prices will rise, held by hedge funds and other large speculators. The index, consisting of 20 raw materials monitored by the U.S. Commodity Futures Trading Commission, rose to its highest since August.
``The gain “indicates further willingness for investors to take on asset classes which they were earlier cautious of,” said Kevin Norrish, an analyst at Barclays Capital in London. The index plunged from a peak of 1.37 million in February last year to as little as 86,220 in December.
``Sugar and corn had the largest net-long positions by the week ended May 19, while investors held the largest net-short positions in natural gas and copper.
``“Agricultural products are not going to be as vulnerable to the current economic retrenchment as things like metals or oil,” Norrish said.
``The Reuters/Jefferies CRB index of 19 raw materials rose 6.3 percent this year, after a 36 percent decline in 2008.
My take: So it's not just China but also international Hedge Funds piling into commodities backed by so many rationalizations.
This is no less than a manifestation of shifting preference to hold "hard assets" over rapidly depreciating paper money.
Monetary forces are indeed gaining traction.
Adds the Bloomberg article, ``The CHART OF THE DAY shows an index of the net long position in U.S. commodity futures, or bets prices will rise, held by hedge funds and other large speculators. The index, consisting of 20 raw materials monitored by the U.S. Commodity Futures Trading Commission, rose to its highest since August.
``The gain “indicates further willingness for investors to take on asset classes which they were earlier cautious of,” said Kevin Norrish, an analyst at Barclays Capital in London. The index plunged from a peak of 1.37 million in February last year to as little as 86,220 in December.
``Sugar and corn had the largest net-long positions by the week ended May 19, while investors held the largest net-short positions in natural gas and copper.
``“Agricultural products are not going to be as vulnerable to the current economic retrenchment as things like metals or oil,” Norrish said.
``The Reuters/Jefferies CRB index of 19 raw materials rose 6.3 percent this year, after a 36 percent decline in 2008.
My take: So it's not just China but also international Hedge Funds piling into commodities backed by so many rationalizations.
This is no less than a manifestation of shifting preference to hold "hard assets" over rapidly depreciating paper money.
Monetary forces are indeed gaining traction.
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