Speculators have cut their net-long positions in 18 US commodities by 15 per cent, data compiled by Bloomberg shows.
Fear over slowing global growth has reduced investment to 958,309 in futures and options contracts including metals, in the week ended 28 June. This is according to US data compiled by Bloomberg and is at the lowest level since 13 July last year.
The Standard & Poor’s GSCI Index of 24 raw materials slumped 7.8 per cent last quarter, which was the biggest drop since 2008. With China’s non-manufacturing industries expanding at their slowest levels in four month to June, this has exacerbated fears that efforts by the Chinese government to curb inflation are also slowing growth.
ICAP Futures vice president Luis Rangel said: “You have slower imports and economic growth from China and other regions of the world, and then you have the threat of rising interest rates. Those are the underlying factors that are slowing the commodity trend.”