Commodity weekly: Crowded trades unwind as energy risks intensify

Crowded speculative positions are driving a broad commodity correction, but persistent energy supply risks keep the longer-term outlook uneven.

• The Bloomberg Commodity Total Return Index is set for a modest weekly decline but remains up more than 35% year-to-date; silver fell about 5.5%, wheat nearly 5%, and gold more than 3%.
• Brent rose above USD 114 per barrel, while European TTF gas gained about 7% to EUR 93.50 per MWh; European inventories are around 845 TWh, roughly 100 TWh below last year and nearly 140 LNG carriers below the five-year average.
• Gold briefly fell below USD 4,000 and silver approached an 11-month low near USD 54 as technical selling outweighed lower bond yields and safe-haven demand; gold support is identified near USD 3,985.
• Exchange-monitored copper inventories reached approximately 1.05 million tonnes, with COMEX and US-based LME stocks accounting for about 85% of the total, making the potential January 2027 US tariff decision a key price risk.
• Iron ore fell below USD 90 per tonne to a two-year low, extending its year-to-date decline to about 15%, while managed money had accumulated more than one million net-long grain contracts and sugar speculative longs reached a five-year high.

Takeaway: Investors should distinguish between liquidation-driven weakness that may create opportunities once positioning normalises and a fundamental demand downturn; energy remains supply-constrained, while copper, iron ore and agriculture face different policy, China and positioning risks.