July 20 (Reuters) - Hedge funds and money managers sharply cut their net short position in U.S. copper futures and options in the week to July 17, as investors covered their short positions on uncertainty over additional monetary easing by the Federal Reserve.
They cut their net short or bearish position in copper by 3,050 to 1,763 contracts, data from the Commodity Futures Trading Commission's Commitments of Traders showed.
The report showed that managed money cut 2,254 contracts on the short side and the group added 796 contracts on the long side as they trimmed their net shorts for a total of 3,050 lots.
U.S. copper was at their smallest net short position since the last week of May, when the market had turned to being short from long. Since then, the market has remained in net shorts for nine consecutive weeks.
U.S. copper futures prices climbed during the week covered by the CFTC report on short-covering ahead of a congressional testimony by Federal Reserve Chairman Ben Bernanke.
"The markets were rallying last week on hopes of the Bernanke put, or another round of monetary easing from the Fed, and the fact that in the short term the doomsday scenario of Europe was kicked further down the road," said Adam Sarhan, CEO of New York-based Sarhan Capital.
Sarhan said that investors were mostly not adding new net longs, which tends to happen more often during healthy rallies.
Speculators slightly raised their net longs in gold by 3,991 to 92,964 lots in the period, after they cut their bullish bets in the previous week.
Gold prices rose in the week up to July 17, but bullion investors were disappointed after Bernanke did not hint at a new round of monetary easing.
On silver futures, the group decreased their net longs by 967 to 4,831 contracts.