Gold set for breakout? Here's a way to play

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A measure of investor positions—the Commitments of Traders data from the Commodity Futures Trading Commission—shows commercial hedgers have near a 10-year "least-hedged" extreme in gold futures, an aggressive bet by the smart money that physical gold is undervalued.

For perspective, a similar least-hedged extreme that I noticed in early July 2013 immediately preceded a more than $200, 14 percent rise in gold to $1,429 by the end of August that year.

Here's a way to play the bullion rally likely ahead.