Gold Outlook: Bulls Eye Rebound, Though Futures Exposure Remains Weak
Gold | 2026-06-03 00:33:33
The technical backdrop for gold has improved in recent weeks, with prices repeatedly finding support around 4,400 and momentum indicators beginning to turn higher.
By Paul Ploumis
SEATTLE (Scrap Monster): Gold continues to show tentative signs of at least a cheeky bounce, although for now it remains suppressed by a stronger US dollar. Still, with demand emerging at lower levels and bulls gaining the upper hand into Friday's close, I am on the lookout for a rebound this week. However, without a catalyst to significantly weaken the US dollar, it is difficult to envisage a sustained bullish trend developing for gold—especially when we factor in the cautious signals coming from both options and futures traders.
The technical backdrop for gold has improved in recent weeks, with prices repeatedly finding support around 4,400 and momentum indicators beginning to turn higher. Yet while price action hints at a rebound, futures and options positioning suggest professional traders remain sceptical that gold is ready to revisit its record highs.
It is difficult to become overly bullish on gold when looking at gold futures positioning and the latest COT report data. Net-long exposure among large speculators has fallen to 154k contracts, its lowest level in two years and two months. While asset managers' bullish exposure has risen slightly, it remains well below its September 2024 peak at just 97k contracts. Moreover, total open interest has plunged to levels not seen since 2009.
Ultimately, professional traders remain cautious following gold's runaway rally to record highs above 5,000, and they appear in no rush to push prices back towards those levels.
This picture is also reflected in the options market, where risk reversals point to stronger demand for puts than calls. The 1-week 10-delta risk reversal shows traders continue to price in downside tail risk, while institutional investors retain a preference for downside protection across longer-dated maturities.
This does not mean gold cannot rally, but it does suggest the market currently lacks strong support from large speculative and institutional participants.
Courtesy: www.forex.com
