Investors cut bullish commodity bets for the first time in three weeks as U.S. lawmakers appeared no closer to an agreement to avert more than $600 billion in automatic tax increases and spending cuts and Europe cut its growth outlook.
Hedge funds curbed bullish bets on commodities for a third consecutive month, the longest retreat since the global recession, as Europe’s worsening debt crisis and slowing U.S. job growth sent prices tumbling.
Speculators raised bullish bets on commodities before signs of Europe’s deepening debt crisis and slowing Chinese growth drove prices lower for a fourth consecutive week, the longest slump since September.
Speculators cut bullish wagers on commodities by the most in 2012 on mounting concern that the slowest Chinese growth in almost three years will curb gains in demand for everything from copper to cotton.
Hedge funds boosted bets on rising commodities to the highest in 15 months, driving prices into a bull market as the U.S. drought worsened and the Federal Reserve signaled it may take more steps to spur economic growth.