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Commitment of Traders (COT) report is a free report published weekly by the US Commodity Futures Trading Commission(CFTC). It reveals positions held by large traders or institutions on Futures markets. Since it is free to download, there are many sources to obtain the entire history of COT reports. While the data is widely available, the resources on how to conduct in-depth analysis using COT reports very limited, so instead of repeating any other basic information about the history or background of COT I will be focusing on how to extract useful information from the report and apply in trading.

Open Interest is not directly related to the rise and fall of asset prices; however, it indicates the overall interest the market participants have in the development of the underlying asset. From the above chart, we see OI reached a high on the week of 2025/4/22 and started to decline, and the GOLD price has been consolidating in a range (around 3250-3400) since.

1. The First hint is that the overall market hype about gold has been dwindling since April 2025

We shall investigate further how different market participants are preparing or repositioning for the coming future.

The above chart displays % percentage of players holding long contracts in GOLD
The speculator(non-commercials) long took control of the bull market since March 2024, which is also approximately the time the gold price took off
Weight of speculator reached high above 76%(more than 76% of long contract held by speculators) in late Feb 2025 and slowly declined to 69.3% on 2025/7/29 and pulled back above 70% recent weeks.
If we use 4/22 as a watermark till now, large speculators
long position weight declined from 74%-71.6% at the same time small traders(non-reportables) increased their weight from 6.3% to 9.1% while hedgers(commercials) remained fairly constant.

1. The consensus is that small traders usually take the last piece of the pie, and we are seeing it happening now. But this is only measured in %, we should investigate deeper

The short component provides more interesting information. We can see around 4/22 that the speculator short weight temporarily took over. Remember, speculators are dominant in long contracts(75%+). The fact that speculators' short weight abruptly rose from below 40% in Jan 2025 to around 55% in late April tells us

1. There is a growing debate among speculators on the future direction of gold. After April 2,2 the speculators' short weight came back to a normal level, and overall OI dropped during the time. The market hype calmed. We need to see further how commercials and non-commercials adjust accordingly.

Below 2 charts below show absolute # of contracts held by commercial and non-commercial, respectively.
At at 1st glance, we know that commercials have been net short on GOLD since 2019. Since early 2021, commercial long on GOLD has been fairly stable. These are likely the producers or manufacturers who need gold as a raw material for further processing.
Positions for commercial sellers varies in large swing, as these participants likes sell golds in future markets to hedge the price fluctuation or lock in price in their favor, this normally happen during gold rise. (The heavier the selling position, the more negative the yellow line)
Latel,y we seea decline in commercial buy along with an increase in commercial sales. No doubt the gold is at all time high, gold processors are less incentivized to purchase unnecessary amount of gold at this price, at the same time the sellers are willing to lock in as much contract at current price as possible in case of future decline. With both sides in sync, the commercial long is pointing to a potential downward movement in GOLD as commercial longs seems to be holding up from buying more and shorts seems to be eager to open more short contracts.
Looking at non-commercials. We have established premised that the current GOLD bull run is primarily driven by non-commercials(speculators) and we have seen the speculators long positions are dwindling since late Feb. on 7/22 there seemed to be another push from non-commercials longs but the price did not react much and the longs came back down since then. Although gold price remained high but the upward momentum has been capped for past 4 months; whoever is holding up the price is out of my scope, but to me all that matters is the main driving force of the bull market seems in the process of cashing out.
Below 2 charts below show absolute # of contracts held by commercial and non-commercial, respectively.
At at 1st glance, we know that commercials have been net short on GOLD since 2019. Since early 2021, commercial long on GOLD has been fairly stable. These are likely the producers or manufacturers who need gold as a raw material for further processing.
Positions for commercial sellers varies in large swing, as these participants likes sell golds in future markets to hedge the price fluctuation or lock in price in their favor, this normally happen during gold rise. (The heavier the selling position, the more negative the yellow line)
Latel,y we seea decline in commercial buy along with an increase in commercial sales. No doubt the gold is at all time high, gold processors are less incentivized to purchase unnecessary amount of gold at this price, at the same time the sellers are willing to lock in as much contract at current price as possible in case of future decline. With both sides in sync, the commercial long is pointing to a potential downward movement in GOLD as commercial longs seems to be holding up from buying more and shorts seems to be eager to open more short contracts.
Looking at non-commercials. We have established premised that the current GOLD bull run is primarily driven by non-commercials(speculators) and we have seen the speculators long positions are dwindling since late Feb. on 7/22 there seemed to be another push from non-commercials longs but the price did not react much and the longs came back down since then. Although gold price remained high but the upward momentum has been capped for past 4 months; whoever is holding up the price is out of my scope, but to me all that matters is the main driving force of the bull market seems in the process of cashing out.

Quoting from the CFTC official site, “Spreading” is a computed amount equal to offsetting long and short positions held by a trader. According to the CFTC definition, I made chart below as an indicator gauging the confidence of large traders in their positions. The higher the ratio the more trades are hedging higher portions of their exposure, which means traders themselves are increasingly uncertain about the market development in near future. From chart below, a few info could be extracted.
The non-commercial shorts held a high spread ratio since early 2024, as they must have incurred heavy loss,es and this high spread ratio is how they limit losses against their net short position. However the interesting thing is since 4/22 the ratio declined, from above non-commercial position we know the overall non-commercial did not change much this whole time so the only explanation is that the # of long contract held by non-commercial shorts for hedging are being closed, which means the shorts once again getting more optimistic about a coming decline in price.
At the same time, the longs are also reducing the spread ratio. There are a few interpretations I may draw. 1. The longs are preparing another upward push. 2. given a sharp rise in spread ratio in March which indicated a rise in different opinions in the price of GOLD within long biased speculators, the current decline in spread ratio along with decline in speculators long position, it could mean there is reduce in interest on GOLD speculator in current market environment.

All analysis above are sharing individual opinion based on personal educational background and professional experience. No financial advice is provided.
While COT report has its limits such as lagging, infrequent updates, highly subjected to individual interpretation etc, there are much useful information can be extracted to gauge overall market sentiment for investors. Whoever spends the time and makes the effort to put pieces together will be able to see the market with much better clarity.
While COT report is useful in providing higher timeframe investment analysis, it has limited use in day to day trading, especially in leveraged and highly volatile markets.

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