Here are a couple of interesting Gold COT analysis reports. The first is from May 22 and shows most small speculators are on the sidelines as almost all Guru’s are bearish. It would seem the participation in this rally has had a rather low participation rate.

Can the “Herd” of small specs and Guru’s on the sidelines be right? They may well be but that would be contrary to what normally happens in markets.

In contrast, pull up virtually any Miner chart, on the weekly, and take a look at the OBV indicator. This indicator alone shows me that Smart Money is accumulating.

Lastly, here is another COT report from this week that sheds some light on what the Commercials are up to:

* While speculative bulls were dropping their gold contracts, larger commercial traders were buying up gold long contracts at the fastest rate in the report’s history.

* While we have been bearish on gold for the past few weeks, we now think it is a good time for investors to start re-establishing gold positions.