FX: Commodities have regained the favor of funds, but there are ominous signs in the oil market!

Traders piled into exchange-traded funds covering oil, metals and grains as investors bet that the global economy would still avoid recession amid rising interest rates.

According to data compiled by foreign media,More than $350 million invested in 20 ETFs tracking broad commodity indices in JulyThis is the second month of inflows this year, following four months of withdrawals.

Ryan Fitzmaurice, chief index trader at Marex Group Plc, a commodities brokerage, said: "In the past year, commodity index products have seen large outflows due to recession fears and falling inflation expectations. Now asset allocators have started to shift back to commodity index ETFs."

The Bloomberg Commodity Spot Index, which measures the value of global raw materials, rose 5.8 per cent last month, its biggest gain since March 2022, driven largely by oil and its derivatives, as production cuts by Opec + leading producers and an improving macroeconomic outlook. Other commodities such as copper, gold, cotton and corn also rose.

Traders are back in commodities ETFs

However, the uncertain economic outlook outside the US remains a headwind, with investors pulling money from some commodity ETFs. After oil prices rose above $80 a barrel,Oil ETFs recently recorded their largest weekly outflows in more than a year, indicating that investors are cashing out.Wednesday.WTI crude oilIt fell by 3% during the day.

A report released by JPMorgan Chase on July 31 shows that, from a broader perspective,Total unpositioned squaring contracts in global commodity markets rose at the end of July to a 13-month high of $1.31 trillionThat includes unpositioned squaring contracts valued at $566 billion in the energy market as of July 28, the bank said.

Analysts including Tracey Allen and Natasha Kaneva wrote, "Our economists note that the surprise of slowing growth and inflation is fueling hopes of a soft landing, and we continue to view commodities as an undervalued asset class."

FXTForex continues to monitor market conditions and reduce risk investment.