Given gold's recent surge, we've decided to give readers a glimpse into some of the work we perform as part of our Weekend Macro Press report. The results shown below pertain to commercial hedger and large speculator positioning in gold futures, dating back to 2001. Real quickly, commercial hedgers are considered very large "smart money" accounts that are almost always right at major price bottoms and tops, while large speculators are hedge funds and CTA (Commodity Trading Advisors) accounts that are considered to be trend followers, which means they are often over positioned in the direction of the trend near major price tops and bottoms.
In a nutshell, what this analysis is showing is that, while gold prices are becoming tactically vulnerable to a mean reversion pullback, the difference in open interest-based positioning by these two important groups of investors is not so extended to suggest that a major trend reversal lower should be expected to develop when gold's advance finally does start to slow.
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