(Technical Analysis) Gold, Coffee, and a Caffeinated September: Hedge Funds Brew Positive Returns

**LONDON (Reuters)** – Gold and coffee have given trend-following hedge funds a rather pleasant boost this September, according to a Societe Generale note on Tuesday, all thanks to surging commodity prices, climbing equities, and a dash of falling interest rates.

Gold has sparkled with a nearly 30% rise this year, reaching an all-time high on 26 September. It’s been one of 2024’s star assets for hedge funds that thrive on sniffing out market trends via price and trading volumes, said the SocGen note seen by Reuters.

Meanwhile, Robusta coffee futures have hit their own highs, stirred by a drought in Brazil—the world’s top coffee grower—causing a bit of a crunch for the 2024-2025 season. It’s bad news for caffeine addicts but rather good news for investors watching the price soar.

In terms of numbers, the 96 funds tracked by Societe Generale’s prime brokerage trading desk clocked an average return of about 0.7% in September. The biggest winner bagged a healthy 7.41%, while the unfortunate soul at the other end saw a 15.77% dip. Over half of these trend-followers posted positive returns for the month, so there’s reason to celebrate.

Now, not everything was rosy. The Australian dollar may have perked up in September, but it’s been a bit of a financial black hole for these funds this year. Other less-than-stellar performers included the Mexican peso, silver, and natural gas. Even the British pound—while it added a sprinkle of positivity in September—has been more foe than friend for the year-to-date.

SocGen’s analysis didn’t exactly spell out the finer details of these trades, nor the counterparties on the other side of these currency crosses. But as September wrapped up, trend-followers were entering some intriguing new positions. Long bets were placed on Hong Kong’s Hang Seng Index, sugar, silver, lean hogs, German and Spanish stocks, and even the currencies of Canada, Australia, and New Zealand.

For the uninitiated, a ‘long position’ is essentially a wager that an asset’s price will rise—just the sort of optimism that might help these funds keep perking up as the year unfolds.