Speculative traders abandoned gold positions at a tremendous rate over the past week.
While speculative bulls were dropping their gold contracts, larger commercial traders were buying up gold long contracts at the fastest rate in the report's history.
While we have been bearish on gold for the past few weeks, we now think it is a good time for investors to start re-establishing gold positions.
In the latest Commitment of Traders report (COT), we saw something very unusual happen but it wasn't on the speculative side. Speculative traders did what we expected them to do with the price downturn - longs sold hand over fists while shorts increased their own positions. But what was unusual was that Commercial traders (the big buyers of gold) increased their positions by the largest weekly amount in the history of the new COT report.
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