Mutual funds, hedge funds and pension funds are reportedly holding an all-time record level of commodities of every kind. Contracts have risen 12% this year and are 17% higher than the previous record set in June 2008, according to the Commodity Futures Trading Commission.

Barclays Capital estimates that investors have placed $121.2 billion into commodities since the beginning of 2009. Helping to drive this interest is the growing number of commodities exchange-traded funds.

Regulators, exchanges and traders themselves are growing concerned that speculators might be artificially driving up or at least distorting prices of such commodities as crude oil, with contracts up 24% since June 2008; copper, up 58% in that time frame; and silver, up 52%.

Certainly, prices of many commodities are soaring. Gold has risen 29% this year to $1,415.30 a troy ounce, and copper has increased 22% to $4.0775 a pound.

The Dodd-Frank bill requires the CFTC to set a limit on the number of energy and metals commodities contracts any one trader may own by January. A similar limit must be set for agricultural commodities contracts by April.

“Speculative money from the likes of hedge funds, index funds and pension funds is coming into the commodities markets at a blistering pace,” said CFTC Commissioner Bart Chilton. “If prices are skewed by speculators in a manner that is not fair, consumers can pay more than they should.”

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.