This was the commitment of traders report for gold as of September 18th, 2012 showing a record small speculator net long position of nearly 60,000 contracts:

Gold_COT_9.18.2012

This is the latest gold CoT report showing positions as of July 30th, 2013:

Gold_COT_7.30.2013

The small specs have moved from a record net long position to a record net short position in the space of less than 10 months - to better illustrate the massive shift in 'dumb money' positioning during the past 10 months:

Click to enlarge

Gold_small_specs_chart

Just as risk was decidedly to the downside in September/October 2012 with small speculators holding a record net long position, risk is now clearly skewed to the upside as small speculators hold a record short position. CoT data is NOT a market timing tool but it certainly helps to highlight where the risk lies in a given market.

Bullish seasonality combined with 'offsides' dumb money positioning could be the right recipe for the next leg higher in gold:

Gold_seasonality