The biggest copper rally in almost six years is leaving hedge funds squaring off with Goldman Sachs Group Inc.

Futures in New York jumped about 20 percent in just a month. The gains were propelled by a drop in London Metal Exchange-monitored inventories and speculation that Donald Trump’s pledges on infrastructure building will increase metals demand. The president-elect seems to have convinced money managers, who boosted their wagers on further price gains to the largest ever.

The surge reflects an abrupt change in sentiment -- just three weeks ago investors were betting on price declines. While other metals had climbed earlier in 2016, copper was mainly dormant, even as Chinese imports rose. That sparked a rush this month among Asian traders. The frenzy picked up steam after the election victory for Trump, who’s called for $1 trillion of infrastructure investment over the next decade. Now, Goldman says that prices have risen too far too fast.

“It’s a parabolic move higher, and parabolic moves can’t be sustained,” Donald Selkin, the chief market strategist at National Securities Corp. in New York helping oversee $3 billion, said in a telephone interview.

Net-Long Holding

The net-long position in copper jumped 19 percent to 70,546 futures and options for the week ended Nov. 15, according to Commodity Futures Trading Commission data released three days later. That’s the largest holding in the data, which starts in 2006. Comex futures renewed their advance Monday after capping their first weekly drop in four. The metal rose 1.9 percent to $2.526 a pound by 12:43 p.m. in Shanghai for an 18 percent gain this year.

Global copper inventories tracked by the LME have slumped 32 percent since the end of September, snapping six months of gains and signaling that demand may be accelerating. The decline for supplies comes as Trump, who secured a win in the Nov. 8 U.S. election, reiterated the importance of infrastructure spending in his victory speech.

Mining shares have fared well in the aftermath. Freeport-McMoRan Inc., the largest publicly traded copper producer, has jumped 14 percent since election night. Jefferies Group LLC said producers of mined commodities will benefit through the next year from the prospect of more infrastructure spending. Copper is used in pipes for buildings and in wiring for electric grids.

But Freeport’s Chief Executive Officer Richard Adkerson had a more measured view of the election than some investors, saying it will take more than Trump to keep prices rallying.

‘Global Economy’

“In terms of being a long-term driver of copper prices, it will have an impact but not a huge impact,” Adkerson said Nov. 16 in an interview at Freeport’s office in Lima. “For copper demand to be robust requires a positive economic situation in China, in the world’s global economy.”

Goldman said last week the copper market became too bullish too quickly, even as it was forced to increase its three-month LME copper estimate 16 percent to $5,000 a metric ton from $4,300. The bank raised its 12-month estimate to $4,800 from $4,200. Their view remains below the current price of copper for delivery in three months, which settled Friday at $5,423, averaging $4,767.54 in 2016. The bank sees gains for supply amidst a modest slowing of Chinese demand growth.

Demand for the metal is currently falling short of production by about 400,000 tons, according to researcher CRU Group. To erase that glut, U.S. copper use would need to increase 25 percent, while China’s consumption would need to grow by 4 percent above the baseline view, Robert Edwards, a managing consultant at CRU, said in an interview last week at an industry conference in Naples, Florida.

“The market is definitely going to pull back some of those gains, because that is what happens until there’s further evidence to underpin the move with more concrete infrastructure spending plans,” said Quincy Krosby, a market strategist at Prudential Financial Inc. in Newark, New Jersey. “There’s definitely going to be zigs and zags in the trajectory of copper prices.”