Here's the same breakdown of the Gold COT with a monthly gold price(a.m. fix) overlaid.
The chart below is a bit convoluted but shows the net concentrated(4 largest traders) positions relative to open interest(black) and the commercial short position(grey). The red line is the percentage of OI held net short by the 4 largest traders; the green line shows the percentage held net long; the blue shows the difference. As you can see, since the start of the gold bull, both the commercial short position and the difference between concentrated shorts and longs have grown. This indicates: 1) that "hedgers" are trying to play the gold futures game by selling theoretical future production forward, into these rallies. If it was all legit hedging the amount wouldn't move in lock-step with the price(although you'd expect some correlation as a higher price provides more incentive for selling production forward). 2) Some of the increase in commercial shorts can be attributed to an increase in concentrated short positions. This makes sense to anyone who trades gold and witnesses some of the "attacks" on the metal, particularly during early NY trading. All it takes is for a few of these concentrated positions to lean on the market, one way or the other, to get it going. 3) This doesn't prove that there is gross manipulation occurring as some analysts speculate. This will be discussed in-depth later but the fact that there is a large concentrated long position, an increase in small commercial shorts alongside concentrated positions(and OI), and a rise in the GOFO rate relative to LIBOR should help disabuse those of the notion of a commercial-short conspiracy. (Although I don't doubt that large comm. shorts and CBs try to influence the market at certain times and there is the old short/sell forward game that many got stuck playing when the market turned I think it goes a bit far to say the concentrated commercial shorts in gold are perniciously manipulative.)
It's also important to see that both long and short concentrated positions are shrinking, indicating a nervousness/uncertainty among large players about future direction. The last time this happened was prior to and during the 06 and early '08 breakouts.
