By: Matt Simpson, Market Analyst
Commodity futures positioning reveals a clear divergence between precious metals and energy markets. While traders continue to trim exposure in gold and silver futures, copper remains elevated and WTI crude oil positioning suggests bulls are preparing for another push higher.
Below is a breakdown of the latest Commitment of Traders (COT) report, focusing on large speculators and managed funds across metals and oil.
Source: CFTC, COMEX, NYMEX, LSEG
Futures traders continued to shy away from the precious metals space in light of heighted volatility and pullbacks on gold and silver
Source: CFTC, COMEX, NYMEX, LSEG
Net-long exposure in gold futures continued to decline, although the pace of selling slowed compared with the prior two weeks. Both managed funds and large speculators have trimmed net-long exposure to an 11-month low.
One development worth monitoring is the gradual rise in gross short positions. While overall short exposure remains relatively subdued, the fact traders are increasingly willing to bet against gold reinforces the view that the metal may struggle to break decisively to fresh record highs in the near term.
Instead, rallies could remain capped, with bulls likely waiting for pullbacks before re-engaging in anticipation of longer-term gains. However, following a classic parabolic rally and subsequent sharp unwind, it may take time for volatility to compress and for the next sustained directional move in gold to emerge.
Source: CFTC, COMEX, LSEG
Net-long exposure continued to trend lower for silver futures, although this has been an established trend for some time. That said, the momentum behind long liquidation is also slowing. Managed funds trimmed just under 1,000 contracts last week — their smallest weekly reduction in nine weeks. Shorts were also reduced by 553 contracts.
To me, this suggests we may have seen the worst of the downside for silver unless a fresh bearish catalyst emerges. Or at least the bulk of the selloff may already be behind us. At the same time, traders appear hesitant to re-enter aggressively. As a result, volatility could remain subdued, with price action confined to choppy, range-bound conditions.
Source: CFTC, COMEX, LSEG
Copper futures remain elevated overall, despite a slow and steady reduction in gross long exposure. The gradual trimming of bullish positions has yet to translate into meaningful downside pressure, suggesting underlying demand remains supportive.
This raises the possibility of either a shallow retracement or a period of sideways consolidation before the next potential leg higher. Notably, the prominent shooting star reversal (a single-bar bearish reversal pattern) around the $6 area has not been followed by a decisive sell-off.
If broader risk conditions remain supportive, bulls may look to re-engage after this rally pauses for breath rather than chasing strength at current levels.
Source: CFTC, COMEX, LSEG
Like copper, WTI crude oil also appears to be a market where bulls are biding their time in anticipation of another leg higher. While the bearish inside week and shooting star candles warn of potential weakness following the prior upswing, gross long positions have continued to rise and shorts remain relatively subdued.
This positioning suggests underlying confidence in the broader uptrend. As such, pullbacks towards $60 could attract fresh buying interest, with crude oil bulls potentially targeting a move back towards $70–$72 in the coming weeks, provided macro and demand conditions remain supportive.
Source: CFTC, NYMEX, LSEG
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