Gold has proven unusually volatile since early June, violently buffeted by outsized chop with a heavy downside bias. That has fueled considerable technical damage and greatly ramped bearish sentiment. Gold’s periodic big down days sure looked futures-driven due to their speed and magnitude. Yet rather mysteriously, speculators’ gold-futures positioning hasn’t reflected that with those traders missing in action.
Often American gold-futures speculators dominate short-term gold fortunes. They are usually responsible for big-and-fast gold moves, especially during US trading days. The main reason is the extreme leverage inherent in futures trading, enabling specs to punch way above their weights relative to capital risked in bullying around gold prices. American COMEX gold futures are their hyper-leveraged trading vehicle of choice.
Each contract controls 100 troy ounces of gold, which is worth $413,550 midweek. Yet these traders are currently only required to keep $20,735 cash in their margin accounts for each gold-futures contract traded. That enables extreme maximum leverage to gold of 19.9x! That’s still lower than usual due to this recent volatility, with 20x to 25x common in normal markets. The risks with such price amplification are huge.
At 20x, a mere 5% gold move against traders’ bets will wipe out 100% of their capital risked! In US stock markets, leverage has been legally capped at 2x since 1974. An order of magnitude greater at 20x, each dollar deployed in gold futures exerts 20x the price impact on gold as a dollar invested outright! So when specs as a herd buy and sell gold futures in size, gold really moves. This explains most volatile gold days.
Further fortifying gold-futures trading’s outsized influence on gold, the resulting US gold-futures price is gold’s world reference one. So gold-futures action also often dominates gold sentiment, really affecting gold’s investment capital flows. Investors are much more likely to buy in a futures-driven gold rally, which amplifies it. And when futures selling hammers gold lower, investors increasingly wax bearish and flee.
So whenever gold sees big daily moves, say 2%+, they are normally explainable by specs’ gold-futures trading. Their positioning is only reported once a week in the Commodity Futures Trading Commission’s famous Commitments of Traders reports. Gold-futures CoTs are current to Tuesday closes every week, but not released until late Friday afternoons. That leaves this critical data both low-resolution and lagging.
In the just-over six weeks since early June, gold has suffered six 2%+ down days averaging hefty 2.9% losses! Those were partially offset by three 2%+ up days averaging similar 2.7% gains. Such chop has made for some volatile CoT-week performances. In the six latest-available CoT reports before this essay was published current to July 14th, gold’s CoT-week swings ran -5.2%, +1.7%, -5.2%, -2.2%, +2.2%, and -1.4%.
Normally larger 2%+ CoT-week gold moves are fueled by parallel spec gold-futures trading running in the same direction. If gold is down substantially, specs were usually selling gold futures proportionally and vice versa. Spec buying or selling gets big over 20k contracts traded in the same direction a single CoT week. Adding longs and covering shorts drives gold higher, while selling longs or adding shorts forces it lower.
Examples are legion. Gold’s late monster record cyclical bull really broke out into early September 2025, with gold soaring 4.3% in a single CoT week. Specs bought a colossal 40.0k long contracts, which was partially offset by a large 17.0k of new short selling. That netted out to 22.9k contracts of buying, which is the equivalent of 71.3 metric tons of gold. Gold surged all through that CoT week including a big 2.6% up day.
That same epic bull collapsed out of crazy-extreme overboughtness into early February 2026, with gold plunging 4.2% in one CoT week. That was driven by specs dumping an eye-popping 43.7k longs while also covering a small 3.2k shorts. That 40.5k contracts of net selling was the equivalent of 126.0t of gold, utterly enormous! Big CoT-week gold moves are usually explained by parallel spec gold-futures trading.
But this strong historical relationship has really broken down recently, particularly in these past six-plus weeks but also since mid-February. Gold’s wild volatility has somehow mysteriously unfolded despite specs largely being missing in action. This chart overlays daily gold closes on specs’ weekly total gold-futures longs and shorts as reported in the CoTs. Note spec longs have been flat, dragging along secular lows!
Spec gold-futures trading not explaining recent big-and-fast daily gold moves is truly a vexing anomaly. Normally the more violent any gold price move especially during US trading days, the more likely it was fueled by hyper-leveraged gold-futures trading. In my line of work as a professional gold-stock trader and financial-newsletter writer, I get to watch the markets all day every day seeing all gold moves unfold in real-time.
And sharp intraday gold swings are almost always triggered by some clear news catalyst, which specs quickly trade upon. For decades those were overwhelmingly major US economic data perceived as altering the Fed’s likely rate trajectory, and pronouncements from the FOMC and top Fed officials to that same end. But during Trump’s second term, his Truth Social posts and press conferences also sparked action.
Gold plunged 3.7% on June 5th because a big upside surprise in monthly US jobs boosted Fed-rate-hike odds. In just a half-hour after that data hit the wires, gold collapsed 1.8%! Investment capital flows don’t move that fast, and don’t respond instantly to news. But gold-futures speculators sure do. The extreme leverage they run compresses their trading time horizons to the ultra-short-term, days or weeks on the outside.
They can’t afford to be wrong for long on gold at 20x, or they will get wiped out. Yet during early June’s Jobs-Friday-straddling CoT week where gold plunged 5.2%, net spec gold-futures selling per the CoT was only 5.3k contracts or 16.5t! That was far too light to explain gold’s collapse, which also shattered its previous multi-month high-consolidation support. A similar gold-futures-less anomaly happened soon after.
A couple CoT weeks later into late June, Trump’s new Fed chair was hawkish on fighting inflation leading his first FOMC meeting. That unleashed heavy gold selling hammering it another massive 5.2% lower in that CoT week. The day of that FOMC decision, gold rallied nicely into it. Then within minutes of that, gold plummeted 2.3% which could only be gold-futures-driven! Unleveraged investors don’t respond so viscerally.
Only heavy gold-futures selling can explain such a sharp gold plunge right after a major news catalyst. And gold kept on selling off hard after the FOMC, plunging five trading days in a row with four in that Fed-straddling CoT week. Yet that CoT report showed specs added a tiny 1.2k longs and only short sold a small 3.4k contracts. That added up to trivial net selling of 2.2k contracts, or just 6.7t in gold-equivalent terms!
I’ve also long tracked gold investment capital flows from American stock investors through the bullion holdings of the world-dominant US GLD, IAU, and GLDM gold ETFs. Over longer weeks-and-months timeframes, they gradually grow more important than spec gold-futures trading in driving gold trends. During that same Fed-straddling CoT week, these ETFs’ bullion holdings actually edged up a slight 0.2% or 4.0t!
Trump’s capricious Truth Social posts in his second term have joined major economic data and big Fed news in spawning sharp gold moves. Last week on July 13th, gold plunged 1.6% within an hour after Trump proclaimed on Truth that “from this point forward” the US “will be reimbursed, at the rate of 20% on all cargo shipped” through the Strait of Hormuz “for any and all costs necessary” to keep that chokepoint open!
Because of that big-and-fast plunge which had to be gold-futures-driven, gold ended that latest-reported CoT week 1.4% lower. Yet specs only sold a modest 7.6k long contracts and covered a tiny 0.1k, which combined for just 7.5k contracts or 23.3t of net selling. Gold has suffered many big down days in the last six-plus weeks with sharp plunges on news, yet spec gold-futures positioning data oddly isn’t reflecting these.
The American gold-futures speculators who usually dominate gold’s short-term price action through their extreme leverage are apparently missing in action! Understanding why is important, as spec positioning reported in the weekly CoTs is essential for gaming gold’s likely near-term direction. Normally what these guys are doing is gold’s most-important indicator. I’ve been racking my brain trying to figure out this anomaly.
One possibility is the low-resolution weekly cadence of CoTs is masking intra-CoT-week spec trading. For example these guys could dump 20k gold-futures contracts on news one day then buy back 20k over the next day or two within that same CoT week, leaving net positioning flat. But this thesis is problematic as some of gold’s big daily moves happened on Tuesdays closing out CoT weeks, leaving no reversal time.
Maybe something has changed in CoT reporting or how gold-futures traders are being categorized in the broad speculator and hedger buckets. But the last major reported change in CoT trader categories was way back in September 2009. Specs’ gold-futures trading explained most of gold’s big CoT-week moves since then, until recently. While some major error could’ve been introduced into CoT reporting, that’s very unlikely.
Specs could be increasingly sitting out gold-futures trading because it is so incredibly risky with gold so darned volatile. I’ve spent over a quarter-century intensely studying and analyzing gold, but would never trade it at 20x leverage in a million years! Trump’s chaotic and mercurial Truth Social posts really moving markets are particularly vexing, as they are inherently unpredictable and possible any time with zero warning.
At 20x if gold swings 2%+ in an hour or two after Trump threatens Iran with military action “unlike anything ever seen before” or declares peace imminent because Iran “desperately wants to make a deal”, leveraged gold-futures traders positioned wrong risk devastating 40%+ losses! They can see jobs reports, inflation data, and FOMC meetings coming and prepare accordingly. But Trump-on-Truth volatility is unprecedented.
Perhaps gold-futures specs are sitting on their hands as Trump’s fickleness jerks around markets. That implies other traders are driving gold’s futures-like big-and-fast moves in other markets. This may be the most-likely explanation of this recent anomaly, but would be vexing if correct. What other forces could be violently acting on gold, mostly during US trading hours, that are new enough not to be apparent in recent decades?
Central banks are unlikely culprits, as their gold buying and selling is mostly gradual. They have very-long-term time horizons for their bullion holdings, far transcending kneejerk reactions on economic data, the Fed, or Trump running his mouth. Maybe crypto stablecoins backed by gold have been trading large amounts of it outside normal channels. But those existed long before these last six weeks or six months.
Often in markets the reasons behind seeming anomalies become apparent later, their drivers unmasked. That will probably prove true with gold-futures specs being MIA too. In the meantime without sufficient evidence to the contrary, specs’ gold-futures positioning per these CoTs has to be considered legitimate. Recent low spec longs are very bullish for gold, as these leveraged traders have vast room to buy and chase.
In late May before this anomaly intensified, total spec longs slumped back to just 247.9k contracts which was a 3.5-year secular low! Back in early October 2023 when gold’s late monster record gold bull was born, they were running 264.8k. And heavy spec gold-futures buying catapulting those back up to 441.0k over the subsequent year was the dominant early driver of gold ultimately skyrocketing 196.4% in 27.8 months.
In this latest-reported CoT week current to last Tuesday, total spec longs were running at similar gold-bull-birthing levels of 271.7k contracts! If gold resumes powering higher on balance and that chaotic downside volatility wanes some, specs could easily flood back in reestablishing normal longs driving gold much higher. Gold’s battered technicals, which futures guys closely watch, also encourage big buying.
Last Thursday the 16th gold plunged 2.1% on bad war news, Iran had asked its Houthi allies ruling Yemen to close the critical Bab-el-Mandeb strait on the other side of the Arabian peninsula from Hormuz. Because Iran shuttered Hormuz, the Saudis have been relying on Bab to export massive amounts of oil bypassing Hormuz. If the Houthis shut down Bab, the already-drained world oil market will become much tighter.
Gold’s drop extended its total drawdown since late January’s extreme parabolic highs to 26.3% over 5.5 months. That’s much larger than normal even after gold’s largest cyclical bulls, arguing this selloff is way overdone. Gold also plunged to just 88.8% of its baseline 200-day moving average that day, clocking in as gold’s most-oversold close in fully 9.6 years! So gold-futures specs have big technical reasons to buy.
Spec shorts are also super-low, unbelievably dropping to their lowest levels in 16.8 years in early June just before this recent anomaly really worsened! So specs also have big room for short selling along with their huge room for long buying. But shorts are much less important for gold’s near-future direction since longs greatly outnumber them. Over the past 52 CoT weeks, total spec longs averaged 4.4x total spec shorts!
So what gold-futures speculators do with their upside bets has proportionally more influence on gold’s price trends. The most-bullish times for gold historically have been when total spec longs are really low leaving them big capital firepower to buy. Their leveraged buying to normalize their positioning is the dominant primary driver of younger gold uplegs and bulls, growing them large enough to later entice back investors.
Odds are missing-in-action American gold-futures speculators will return sooner or later here. Gold’s unusual war-news-driven volatility of recent months should wane, either from the war intensity moderating or Trump posting less about his war on Truth as midterm elections loom. Specs rebuilding normal long gold-futures positioning should drive gold well higher, with great mid-tier and junior gold miners amplifying its gains.
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The bottom line is American gold-futures speculators have been missing in action for months now. Their weekly positioning data isn’t reflecting big-and-fast daily gold moves off news catalysts that certainly look futures-driven. Specs have probably been sitting out because the extreme leverage they run combined with Trump’s capricious Truth posts randomly battering around markets makes trading futures incredibly risky.
But specs pulling back has left their gold-futures positioning very bullish for gold. Their upside bets are near major secular lows that birth big uplegs and bulls. And gold’s excessive drawdown after its last record bull has hammered it back to its most oversold levels in nearly a decade. That should help entice back these traders soon. And their leveraged buying to normalize low longs ought to catapult gold well higher.
Adam Hamilton, CPA
July 24, 2026
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