Driven by growing concerns over U.S. government debt sustainability and renewed focus on the debasement trade, speculative bullish positions in gold have increased for the third consecutive week. Although current bullish sentiment has hit its highest level this year, it remains lower compared with 12 months ago and has fallen notably from the start of the year.
Speculative Bulls Boost Positions for Three Straight Weeks
According to the disaggregated Commitment of Traders report released by the U.S. Commodity Futures Trading Commission (CFTC) for the week ending August 18, money managers raised their total speculative long positions in Comex gold futures by 5,961 contracts to 154,595 contracts. Meanwhile, short‑positions rose by 1,975 contracts to 12,947 contracts.
In terms of net positioning, gold’s net long position climbed to 141,648 contracts, marking the highest level since late September last year. Over the past three weeks, gold net longs have increased by 18%, representing the longest streak of consecutive growth since June.
BofA: Gold Still Has Upside Potential
Bank of America’s (BofA) August Global Fund Manager Survey shows that gold still holds potential for further strength despite subdued overall market sentiment. Released last week, the survey points out that gold appears to be at its most undervalued since March 2023.
The share of fund managers viewing gold as undervalued rose to 16% from 6% in July. This signals rising institutional investor interest in gold allocation, yet overall sentiment has not returned to stronger historical levels.
$4,000 and $5,000 Levels in Focus
Candace Browning Platt, Head of Global Research at BofA, stated in a Sunday report that models from the bank’s commodity strategy team indicate current investor buying momentum corresponds more closely to a gold price of $4,000 per ounce. For gold to hit $5,000 per ounce, investor buying flows will need to accelerate further.
She added that central‑bank purchases have been supportive, with June buying volumes well above the 12‑month average. She also noted that dovish signals from this week’s Jackson Hole symposium would be positive for gold.
Even though gold has rebounded sharply from its July lows, some analysts believe there remains substantial upside as the $5,000 threshold comes into view. Nevertheless, current speculative momentum sits below the 12‑month high of 165,519 net long contracts. The most recent higher speculative peak was hit in early January 2025, when net longs reached 215,000 contracts.
Inflation Fears and Fed Policy Path Serve as Variables
Analysts also warn that despite the clear shift toward bullish sentiment in the gold market, headwinds peRSIst. Rising oil prices are stoking inflation worries and could force the Federal Reserve to hike interest rates again before year‑end, creating potential pressure for non‑yielding gold.
Bart Melek, Head of Commodity Strategy at TD Securities, stated that worries over U.S. dollar depreciation should continue to support gold in the coming weeks, as the Fed has yet to send clear signals on addressing higher inflation. Still, he noted that with crude oil prices pushing short‑term rates higher, it is too early to expect gold to rapidly advance toward the bank’s $5,350‑per‑ounce target.
Overall, gold is currently supported by debt concerns, central‑bank buying and market expectations for policy shifts. Uncertainty surrounding oil prices, inflation and the interest‑rate path will determine whether gold can break out into higher ranges in the next phase.