Hedge funds are making the biggest bet against copper on record as global inventories expand to a nine-year high, while concern that Europe’s debt crisis will spread spurred the biggest gain in gold bets since 2008.

Speculators raised net-short positions in U.S. copper futures and options by 53 percent to 25,719 contracts in the week ended March 19, according to Commodity Futures Trading Commission data that begins in 2006. A jump in bullish bets on corn, gold and natural gas boosted overall holdings across 18 raw materials for a second consecutive week.

Copper prices are heading for a second consecutive monthly loss in what would be the longest slump since the end of 2011. Stockpiles monitored by exchanges in London, Shanghai and New York stand at about 873,000 metric tons, or almost five months of North American demand, and Barclays Plc is forecasting a second annual surplus. Gold climbed for three weeks, the longest rally in six months, amid turmoil over Cyprus’s efforts to win a bailout to avert its financial collapse.

“We’re sitting on unprecedented stockpiles of copper and other metals,” said Jack Ablin, the chief investment officer of BMO Private Bank in Chicago, which oversees about $66 billion of assets. “Demand has been pretty tepid for industrial metals. In the global economy, we’re seeing improving growth, but it’s still at a slow rate.”

Copper dropped 1.5 percent to $3.466 a pound on the Comex last week, the biggest retreat in a month. The Standard & Poor’s GSCI Spot Index of 24 commodities fell 0.9 percent. The MSCI All-Country World Index of equities declined 1.1 percent and the dollar rose 0.1 percent against a basket of six major trading partners. Treasuries returned 0.4 percent, a Bank of America Corp. index shows.

LME Stockpiles

Inventories of copper monitored by the London Metal Exchange jumped 77 percent this year to 565,350 tons, the highest since October 2003. Supplies tracked by the Shanghai Futures Exchange are at the highest since the data begins in January 2003. Chinese imports of the refined metal declined in February to the lowest in 19 months, while exports rose for a sixth month, government figures showed March 21.

Prices dropped along with most commodities last week as Cyprus neared the brink of financial collapse, reviving concern that Europe’s debt crisis will erode global growth. The continent accounts for 18 percent of copper demand, Barclays estimates. Overnight, Cyprus dodged a disorderly default and unprecedented exit from the euro currency by bowing to demands to shrink its banking system in exchange for a 10 billion-euro ($13 billion) bailout.

Air Conditioners

Sales of air conditioners and orders for electrical equipment suggest improving demand in China, Rachel Zhang, an analyst at Morgan Stanley in Hong Kong, said in a report last week. The nation’s passenger-vehicle market rose 20 percent to 2.84 million units in January and February in the strongest start since 2010. The transportation industry accounts for about 11 percent of the country’s copper use and household appliances 15 percent, according to data compiled by Bloomberg Industries.