China will probably increase its spending on infrastructure and the country's economy is showing signs of stabilization, including in the housing market, Andrew Harding, the chief executive officer of London-based Rio Tinto Group's copper unit, said in New York on Nov. 14.
China Policies
"Demand for commodities will depend a lot on what policies China adopts and the growth in the economy," said Peter Jankovskis, who helps oversee $3 billion of assets as co-chief investment officer at Lisle, Illinois-based Oakbrook Investments LLC. "We could see some pro-growth policies."
The S&P GSCI rallied 11 percent in the third quarter as the Fed announced open-ended purchases of $40 billion of mortgage debt a month and policy makers at the European Central Bank agreed to an unlimited bond-purchase program. China approved a $158 billion subways-to-roads construction plan in September.
"The bullish effects from dovish ECB and Federal Reserve announcements have clearly been exhausted," Societe Generale SA analysts said in a report Nov. 12. The S&P GSCI fell 6 percent since Sept. 13, when the Fed unveiled its plan.
The U.S. faces a so-called fiscal cliff of $607 billion in automatic tax increases and spending cuts in 2013 if Congress should fail to act.
"If we get out of this with a moderate recession, I would say the price is very cheap," former Fed Chairman Alan Greenspan told Bloomberg Television's "In the Loop" with Betty Liu on Nov. 16.
Copper Bears
Speculators are now betting on a decline in copper prices, holding a net-short position of 826 contracts, the CFTC data show. A week earlier, the funds held a net-long position of 2,077 futures and options.
Crude-oil bets tumbled 18 percent to 100,021 contracts, the biggest cut since May, and those on heating oil dropped 12 percent to 26,065 contracts, the lowest since Sept. 25.