Commercial traders include producers, processors, refiners, bullion merchants, jewelry manufacturers, physical bullion management firms, mercenary swap dealers, etc., and the bullion-trading banks many of them end up trading through on the COMEX bourse. Commercials are the people involved in the gold trade who predominantly use futures to hedge their price risk.
As of this June 28 report (data as of Tuesday, June 25), the commercial hedgers had their least net short (least number of net hedges) for gold as a percentage of the total COMEX open interest (9%) since December, 2001, which coincidentally was the last time commercial traders as a group were net long gold futures. Gold changed hands for $270 the ounce back then, by the way. So one might conclude that with gold in the $1270s last Tuesday, the combined commercial traders of gold futures’ expectations that the gold price would fall further than it already has is equivalent to when gold was trading in the $270s (not a misprint), three months after the 9-11 terrorist attacks in New York, Washington D.C. and Pennsylvania.
That is to say that the commercials are not positioning for further gold weakness if their net futures positioning is any guide. Much more in the video embedded below for convenience. A direct link to view it on YouTube is at the end of this posting.