Gold: do traders expect a continuation of the correction?

The Commodity Futures Trading Commission (CFTC) COT (Commitments of Traders) reports for the week ending on Tuesday last week showed that

Non-commercial large speculators increased their net buy position in gold by 0.2k contracts, bringing it up to 195.8k. This marks the second week of a build-up in net buy position after a 3-week decline, and is the highest net position since May 3, 2022.

Hedgers (COMMERCIAL) saw a 4.9k contract increase in their net selling position of gold, bringing it up to 222.5k. This marks the second consecutive week of increased net selling for Hedgers-operators. The net position has now surpassed the levels of early April, reaching its highest point since May 10, 2022.

The number of open contracts rose by 25.1 thousand, bringing the total to 519 thousand.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators decreased by 0.16 to 3.77 during the week, which was caused by an increase in sales.

The latest Gold COT data shows that bullish sentiment is on the rise, particularly among hedgers. Traders have been increasing their net position as prices continue to climb. Large speculators have also updated their highs for the past year, while hedgers have reached their highs. If this trend continues, it could lead to further price increases for gold.

Traders, particularly large speculators, were simultaneously amassing their positions in anticipation of a price decrease, with some of them expecting a correction from near-record levels.