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Home : Commodities : FACTBOX Deleveraging in commodities amid financial crisis
FACTBOX Deleveraging in commodities amid financial crisis Investors have been selling commodities to reduce risk and raise cash, a process known as deleveraging, amid the global financial crisis.
Commodities attracted huge inflows of speculative money earlier this year as a hedge against a weak U.S. dollar and inflation. At end-June, the Commodity Futures Trading Commission (CFTC) put the value of index-linked commodity futures and options at around $200 billion. By July, a six-year rally in commodities had appeared to hit its peak as prices of oil and various raw materials struck record highs due to inflationary pressure and demand from growing economies like China. Since August, the trend has reversed and commodities have given back almost all of their 2008 gains -- some were even down for the year -- as the global credit crisis worsened. Barclays (nyse: BCS - news - people ) Capital estimates that assets under management in commodities fell $60 billion in value in the third quarter. Following are CFTC figures on the net long, or bullish, and net short, or bearish, positions held by noncommercial investors or speculators in 14 key commodities for the week ended Oct. 7 compared with Sept. 30. There is also a comparison of open interest -- the total number of contracts not closed or delivered on a particular day -- during that period. http://www.forbes.com/reuters/feeds/reuters/2008/10/13/2008-10-13T190100Z 351 times read
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