Technical analysis by SadarExplore about Symbol PAXG: Buy recommendation (5/19/2025)

Full Guide: How to Use COT Data for Trading XAUUSD (Gold)1. What is COT Data?The Commitment of Traders (COT) report is a weekly publication by the Commodity Futures Trading Commission (CFTC). It shows the aggregate positioning of different types of traders in the futures markets.For XAUUSD (Gold), you’ll look at the Gold futures (COMEX) section.2. Key Trader Categories in COT Report1. Commercials (Hedgers):Typically big institutions or producers like mining companies.They use futures to hedge exposure, not speculate.Usually short during rallies and long when price is low.2. Non-Commercials (Large Speculators):Hedge funds, money managers.Considered the "smart money." Full Guide: How to Use COT Data for Trading XAUUSD (Gold)1. What is COT Data?The Commitment of Traders (COT) report is a weekly publication by the Commodity Futures Trading Commission (CFTC). It shows the aggregate positioning of different types of traders in the futures markets.For XAUUSD (Gold), you’ll look at the Gold futures (COMEX) section.---2. Key Trader Categories in COT Report1. Commercials (Hedgers):Typically big institutions or producers like mining companies.They use futures to hedge exposure, not speculate.Usually short during rallies and long when price is low.2. Non-Commercials (Large Speculators):Hedge funds, money managers.Considered the "smart money."Follow trends and often drive major moves.3. Nonreportables (Retail/Small Traders):Smaller traders, often contrarian indicators.Not always consistent with price direction.---3. Where to Find COT DataCFTC WebsiteTools like:Tradingster.comBarChart.comCOTbase.comLook for "Legacy" or "Disaggregated" COT reports for Gold - COMEX.---4. How to Read the COT Data for GoldKey Metrics:Longs/Shorts: Number of contracts held.Net Positions: Longs minus Shorts.Changes WoW: Increase/decrease in positions compared to the prior week.Example Insight:If Non-Commercials are heavily net long, and reaching historical highs, market may be overbought.If Commercials increase shorts significantly, they may be preparing for a price decline.A divergence between price action and COT data often signals potential reversal.---5. Using COT for Gold Trading (XAUUSD)A. Trend ConfirmationRising net long positions by non-commercials = bullish confirmation.Decreasing net long or rising shorts = weakening trend or reversal.B. Reversal SpottingExtremes in positioning (e.g., record longs by speculators) often precede reversals.Look for non-commercials reducing longs while commercials increase shorts—potential top.C. Liquidity Grabs and COTIf gold grabs liquidity (stop hunts) and COT shows heavy speculative positioning, that could be a smart money trap.A strong bullish reversal after liquidity grab with increasing net longs confirms a momentum shift.---6. How to Combine COT with Technical AnalysisUse COT to validate or question what you see on the chart.Example Setup:Chart: Gold drops below key support (liquidity grab).COT: Non-commercials increase longs that week.Conclusion: Smart money bought the dip — potential for bullish reversal.Combine with:Market structureVolumeSentiment toolsPrice action (e.g., bullish engulfing, break of structure)---7. Limitations and TipsLagging Data: COT is released every Friday for data on Tuesday.Use it for context and macro positioning, not for intraday trades.Look at weekly or monthly trends, not daily.Best used alongside price action and other confirmation signals.---ConclusionCOT data is a powerful tool for understanding who is behind the move in gold. By tracking the positioning of major players, you can:Confirm trendsSpot early signs of reversalAlign your trades with institutional momentum