Speculative traders added more than 21,000 net long gold contracts in the week to August 25, marking the largest weekly increase since early June, according to the Commodity Futures Trading Commission's Commitments of Traders report. The move brought total net longs to just over 243,300 contracts, placing gold exposure at the 99th percentile of its five-year range — the most crowded long position in the entire report.
The gold buying was part of a broader constructive shift in speculative positioning across several asset classes. Canadian dollar short covering led the overall moves, while euro shorts were also reduced and British pound positioning improved.
Canadian dollar leads currency repositioning
Non-commercial net shorts in the Canadian dollar shrank by more than 36,500 contracts to approximately 121,500 contracts. That was the biggest weekly improvement since mid-December. USD/CAD traded lower over the reporting period, with the Canadian dollar gaining ground as positioning improved. Net positioning rose to the 21st percentile of its five-year range.
Euro net shorts also narrowed, falling by roughly 22,700 contracts to more than 36,300 contracts — the strongest weekly improvement since mid-April. EUR/USD advanced markedly, surpassing the 1.1700 level for the first time since early May. Despite the improvement, euro net positioning remains near the 10th percentile of its five-year range.
British pound positioning improved by just over 10,000 contracts, with GBP/USD gaining strong upside traction well above 1.3600.
Yen and Australian dollar see mixed flows
Japanese yen positioning moved in the opposite direction. Speculators added nearly 10,400 contracts to their net short position, even as the yen gathered pace and USD/JPY traded with modest losses.
Australian dollar net shorts widened by just 296 contracts, despite a solid performance from AUD/USD, which finally exceeded the 0.7100 barrier. AUD exposure remains elevated near the 81st percentile.
Other notable positioning changes
WTI crude oil net longs increased by almost 1,400 contracts amid a decent drop in the price of a barrel. WTI positioning remains near the 13th percentile, despite the modest increase in oil longs.
Speculators trimmed VIX net shorts by roughly 11,300 contracts, mainly because the reduction in gross shorts more than offset the decline in gross longs. The so-called panic index traded with a positive footing but met resistance around the 16.00 zone.
Coffee speculative positioning increased marginally by 107 contracts alongside a modest price gain.
Key takeaways
- Gold net longs rose by more than 21,100 contracts to just over 243,300 contracts, the largest weekly increase since June 2
- Gold exposure sits at the 99th percentile of its five-year range, the clearest crowded long in the report
- Canadian dollar short covering led all moves, with net shorts shrinking by over 36,500 contracts
- Euro and British pound positioning also improved, while yen net shorts widened
Common questions
What is the CFTC Commitments of Traders report?
The Commitments of Traders (COT) report is a weekly publication from the Commodity Futures Trading Commission that shows the positioning of different types of traders in US futures markets. It is widely used to gauge speculative sentiment in commodities, currencies and financial instruments.
What does a net long position in gold mean?
A net long position means that speculative traders hold more contracts betting on rising gold prices than contracts betting on falling prices. A rising net long figure typically indicates growing bullish sentiment among speculators.
What is the significance of the 99th percentile for gold positioning?
When gold net longs are at the 99th percentile, it means that positioning has been higher only 1% of the time over the past five years. It signals that speculative bullishness is extremely elevated by historical standards, which some analysts view as a potential contrarian indicator.
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The shifts in speculative positioning occurred against a backdrop of broader market movements in the final days of the reporting week. Gold declined sharply after the period covered by the COT data, falling to test its 200-day moving average near $4,530 per troy ounce as the US dollar strengthened following hawkish comments from Federal Reserve Chair Warsh at the Jackson Hole Symposium. The dollar rebound and a rise in US Treasury yields weighed on the precious metal as markets continued to price in a Fed rate hike in September.