LONDON, Reuters The vicious squeeze on the CME copper contract appears to have largely passed but fund managers are sticking with their bullish convictions on both U.S. and London markets.

There has been some light profittaking as the price has retreated from last month39;s record highs but fund long positioning remains elevated both on the CME and London Metal Exchange LME.

The money surge into copper is part and parcel of a broader rotation of funds into the base metals sector but copper39;s supercharged rally to a CME peak of 5.20 cents per lb and an LME high of 11,404.50 per ton has made it the star attraction.

However, Doctor Copper39;s new investor friends may find their bullish resolve tested in the days ahead.

With the shortcovering momentum on the CME contract now abating, fund longs are left waiting for fundamentals to catch up with their price expectations.

LONG AND STRONG

Fund managers trimmed their long positions on the CME copper contract by 7.4 over the week to May 28, according to the latest Commitments of Traders Report COTR.

However, bets on higher prices amounted to a hefty 128,344 contracts, which is still the largest bull commitment since January 2018.

The net collective long position is lower at 63,787 contracts. There has been no short capitulation. Indeed outright money manager short positions edged up by 2.0 to 64,557 contracts.

However, it39;s clear that the bulk of the recent investment flow remains sitting on the long side of the…