“Fed stimulus has been tremendously important for commodities prices, and people are selling with the perception that it’s coming to an end,” said Donald Selkin, the New York- based chief market strategist at National Securities Corp., which manages about $3 billion of assets. “Spending cuts and the debt-ceiling debate are another factor that’s weighing on the outlook.”
Money managers added $839 million to commodity funds in the week ended Jan. 2, said Cameron Brandt, the director of research for Cambridge, Massachusetts-based EPFR Global, which tracks money flows. Inflows to gold and precious-metals funds totaled $612 million, he said.
Bullish Cotton
Bullish wagers on raw sugar jumped 34 percent to 25,496 contracts, the highest level since Oct. 30. A measure of net- longs for 11 U.S. farm goods slid 2.8 percent to 390,996 contracts, the CFTC data show. Bullish cotton bets climbed 12 percent to 28,821 contracts.
“Given the expectation for easy money and currency devaluation and the recovery in economic growth worldwide, the outlook is good for commodity prices,” said Michael Cuggino, who manages about $17 billion of assets at San Francisco-based Pacific Heights Asset Management. “Liquidity is still increasing and the devaluation of currencies is increasing, and that’s bullish for commodities.”