While the net spec and fund long in gold (adjusted for the $30 rally into Friday's high) suggest the market is heavily overbought, we suspect technical signals will take a backseat to classic flight to quality headline news flow.

However, with the post-COT report rally, the net spec and fund long in gold is likely the longest in two years, and therefore any sign of a cease-fire between Israel and Hamas could result in a massive correction.

Gold positioning in the Commitments of Traders for the week ending April 23rd showed Managed Money traders net bought 3,296 contracts and are now net long 176,157 contracts...[MORE]

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