Speculators Cut Bullish Commodity Bets on Fiscal Cliff Talks

Bets on higher crude-oil prices surged 12 percent to the highest since October. Prices fell 3.4 percent last week in New York trading. The funds switched to betting on a decline in natural gas prices for the first time in three weeks.

Gold Wagers

Bullish gold holdings dropped to 126,073 contracts, the lowest since Aug. 21. Goldman lowered its 12-month estimate by 7.2 percent to $1,800 an ounce on Dec. 5 and said the metal would average $1,750 in 2014. Gold for immediate delivery closed at $1,704.05 on Dec. 7, and rose 0.5 percent today to $1,712.85. Fourteen of 31 analysts surveyed by Bloomberg expect prices to rise this week, 10 were bearish and seven were neutral, making the proportion of bulls the lowest since Oct. 19.

A measure of net-longs for 11 U.S. farm goods rose 10 percent to 535,463 contracts, the CFTC data show. Investors became bullish on cotton for the first time in five weeks, holding 650 net-long bets compared with a net-short wager of 9,862 contracts a week earlier.

Wheat holdings dropped 20 percent to 34,429 contracts and are down 57 percent from this year’s peak in August. From June 1 to Nov. 29, U.S. exporters shipped 12.1 million metric tons, 12 percent less than a year earlier, government data show.

“Aggregate demand for raw materials is bad, and that’s why we’re seeing a backwash” in prices, said Stanley Crouch, who helps oversee $2 billion as chief investment officer at New York-based Aegis Capital Corp. “The whole world is based on consumption, and now consumption has been artificially enhanced.”

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