Gold traders shift to bearish stance amid market caution

Traders in the CME gold futures market are growing increasingly cautious, despite maintaining a net-long position. Over the past five weeks, both large speculators and managed funds have reduced their long positions, signaling a shift in sentiment. Managed funds, in particular, increased their gross shorts last week, while large speculators have done so for the past two weeks. Although these adjustments have been marginal, they indicate a growing bearish outlook on gold.

Options traders are also reflecting this sentiment, with risk reversals showing a rising demand for put options over call options. This shift suggests that traders are positioning themselves for potential declines in gold prices. While the bearish sentiment is not yet extreme, the overall trend points toward a cautious approach in the gold market.