If you are long gold, you’re no contrarian. U.S. Commodity Futures Trading Commission (CFTC) data shows that the net long position of speculators in gold has reached an all-time high of 93.6%.
Worse yet, nearly 100% of money manager speculators within this data, such as gold-related index funds and managed accounts, are long gold.
There’s a dearth of traditional market players on the long side. Which has caused some professional traders to worry they might run out of people to sell to, once investment funds’ buying interest is exhausted.
Hard Assets Investor: For now, there seems plenty of contracts on offer by others in the gold trading ring as commercials and swap dealers got even shorter last week. Even large noninstitutional traders and small speculators lightened up their net long exposure by taking some money off the table.
Open interest is still building in gold futures, so new traders are entering the fray. But, with every trader category getting shorter, and only money managers as net buyers, you’ve gotta ask yourself: “What do these guys know … or think they know?”