By: Matt Simpson, Market Analyst
The latest Commitment of Traders (COT) report highlights a clear divergence across commodity futures. Positioning in gold and silver has stabilised near recent highs, suggesting traders are reluctant to aggressively chase metals after recent volatility. In contrast, crude oil futures are seeing stronger conviction, with Brent attracting a surge in long positions. At the same time, futures traders continue to unwind bearish bets on the US dollar, revealing a notable divergence between asset managers and large speculators.
Source: CFTC (COT), LSEG
Net-short exposure to the US dollar extended for a third week, with futures traders reducing their aggregate positioning to -$5.7 billion. This means traders have reduced net-short exposure by $17.1 billion over the past three weeks — the fastest pace of reduction over this timeframe since November 2024.
Source: CFTC (COT), LSEG
Net-short exposure to the US dollar continued to unwind last week, with aggregate futures positioning falling $7.4 billion to -$5.7 billion, a six-week low. This marks the third consecutive week of short covering, with the $17.1 billion reduction over the past three weeks representing the most aggressive three-week pullback in bearish dollar bets since November 2024.
Asset managers increased their net-long exposure to the US Dollar Index to a 14-week high of 7.2k contracts. The modest 0.2k weekly increase was driven by 2.5k new long positions alongside the closure of 3.6k short contracts, marking the largest weekly shift in their positioning since August 2023.
In contrast, large speculators continued to add to net-short exposure even as the US Dollar Index pushed back above the 100 handle, highlighting a divergence between institutional asset managers and speculative futures traders.
Source: CFTC (COT), LSEG
I’ve grouped gold, silver and copper together this week as there has been little meaningful change in positioning compared with recent weeks. Traders appear hesitant to aggressively chase these markets following the turbulence seen near their recent highs.
While net-long exposure has ticked slightly higher for gold and silver, it still lacks any real conviction from the bullish camp — which is hardly surprising given the volatile conditions around recent highs.
Copper has arguably held up the best of the three. Net-long exposure has nudged higher among large speculators and managed funds, suggesting it may remain relatively supported. However, price action has yet to confirm a clear swing low across any of these markets, which could keep futures traders approaching them with cautious scepticism for now.
Source: CFTC (COT), LSEG
When you consider that large speculators are almost always net-short Brent futures, it really highlights the speed at which their net-short exposure has collapsed over the past three weeks. Specifically, net-short exposure has fallen to just -13.1k contracts, down from a 15-month high of 49.4k contracts only three weeks ago. And the shift in sentiment has been driven by a surge in long positions rather than a reduction in shorts.
Gross longs surged 13.8k contracts (21.5%) to a record high last week — their fastest weekly increase since October 2023. For a market where this group typically uses Brent for hedging, the surge suggests that some of this activity may be coming from traders who usually favour WTI instead of Brent.
Of course, if Middle East tensions were to ease materially, many of these bullish bets could unwind just as quickly. But for now, the data suggests a rising probability that large speculators could flip to net-long Brent futures, which would be the first time since June.
CFTC (COT), LSEG | Analysis: StoneX
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