COT for Gold Traders: How to Read the Gold COT Report

COT for gold traders means one weekly report: the CFTC’s Disaggregated Commitments of Traders for COMEX gold futures, which counts who holds the longs and who holds the shorts. Read well, it tells you how much fund money is already riding on gold, and who holds the other side.

Forex Fundamentals does not publish gold positioning. The CFTC does, each Friday at 3:30 p.m. Eastern Time for the Tuesday before (cftc.gov). The COT report for forex on this site covers the currencies, including the US dollar (Dollar Index) COT report. That one matters for gold too, because gold is priced in dollars.

Four groups, and the one people misread

The report sorts every large trader in gold into one of four groups (CFTC Disaggregated explanatory notes):

• Producer/merchant/processor/user: firms whose business is the physical metal and who hedge it in futures, such as a miner selling next year’s output today.
• Swap dealers: firms that deal mainly in gold swaps and hedge that risk in futures. Their clients can be hedge funds or commercial firms.
• Managed money: commodity trading advisors, commodity pool operators and the unregistered funds the CFTC identifies. In plain words, the funds.
• Other reportables: every other trader large enough to report.

Take the week of Tuesday 4 August 2020, futures only, in contracts of 100 troy ounces (CFTC Disaggregated data). Open interest was 561,837.

• Producer/merchant: 19,158 long, 116,748 short, net −97,590
• Swap dealers: 79,645 long, 258,400 short, net −178,755
• Managed money: 165,357 long, 51,885 short, net +113,472
• Other reportables: 156,490 long, 31,216 short, net +125,274

Start with the short. The older Legacy report adds producers and swap dealers together as “commercials”, net short about 276,000 that week (CFTC Legacy data). It is easy to picture miners hedging their output. But about two-thirds of that short belonged to swap dealers, and a swap dealer’s futures short is there to hedge swaps it has written for clients.

The mix moves over the years, which is the reason to read the split rather than the total. On 6 September 2011 it was the other way round: of the 228,000 contracts that producers and swap dealers were net short together, producers and merchants held about 200,000.

Over the whole history the shift is plain. Add up each group’s net short over each calendar year, from June 2006 to October 2026 (CFTC Disaggregated futures-only data), and the swap dealers held between about 15% and 35% of the combined short in every year from 2006 to 2012. From 2023 to 2025 they held about 80%, and 89% so far in 2026. They have held more than half of it in every weekly report since 22 October 2019.

So a commercial short of the same size meant something different in 2011 and in 2024. Then it was mostly miners and merchants hedging metal. Now it is mostly dealers hedging swaps they have written for clients.

Then the long side. Managed money is the group everyone quotes, yet in August 2020 the other reportables held more: about 125,000 net long against the funds’ 113,000.

A big commercial short is normal in gold

Producers and swap dealers together were net short in 1,056 of the 1,062 weekly reports from 13 June 2006 to 13 October 2026 (CFTC Disaggregated futures-only data). So a large commercial short tells you nothing on its own. It is what the gold market looks like.

The six exceptions are worth knowing. They were the six weeks from 4 September to 9 October 2018, when the funds were heavily short gold. On 9 October 2018 managed money was net short about 109,000 contracts, the largest net short in the whole series. A week later it was down to about 49,000, and by 31 December 2018 the funds were net long about 50,000. Only afterwards could anyone see that 9 October had been the extreme.

The position that swings, stretches and snaps back is managed money, so that is the one to follow. The hedgers tell you something through the change. A swap-dealer short that grows during a rally can mean clients buying gold exposure through swaps, which says more about client demand than about the dealers’ own view.

Currencies work differently. Currency futures are in the Traders in Financial Futures report, which has no commercial group at all; there you watch the leveraged funds (COT Report Explained).

Reading how crowded the funds are

A managed-money net long of 200,000 contracts means nothing until you ask: compared to what? A percentile ranks this week against the position’s own history. At the 95th, the funds have been less long than this in 95% of the weeks. A z-score counts how many standard deviations it sits from its average. Both answer the same question: how crowded is the trade?

Crowding matters because of the money still to come. When most funds that want to be long gold already are, a rally needs buyers it may not find. And every one of those longs is a possible seller if the story changes.

The net position is the funds’ longs minus their shorts, and it is worth reading with two other things beside it:

• Open interest. A rally in which the funds’ net long and open interest both rise has new money behind it. One in which price rises but positioning stalls has less.
• Silver. It is in the same report with the same four groups. It is a smaller market, so its positioning can swing harder; judge it against its own history, never against gold’s numbers.

How the warning signs fit together, with a real currency example, is in COT Data Reversals.

Where gold COT fits

COT tells you how crowded the trade is. The direction comes from gold’s macro drivers: real interest rates, the dollar, risk appetite and central banks’ demand.

That last one is large and mostly invisible in this report. Central banks bought 1,044.6 tonnes of gold in 2024, the third year in a row above 1,000 (World Gold Council, Gold Demand Trends 2024). They buy metal for their reserves rather than futures, so the COT report shows you the funds and the hedgers, and only part of who is buying gold.