is reclaiming its safe haven status.
The precious metal rallied this week to one-month highs after Fed minutes released on Wednesday hinted that a rate hike might not happen in September. Gold prices are now up more than 6 percent from the late-July low and in the midst of its best week in five months, but the sharp rally has one gold bull yielding caution.
"I think what's happened over the last week or two is there were so few contracts being long that short positions topped out," Bob Alderman said Thursday on CNBC's "Futures Now." "I think these shorts are providing fuel to exaggerate [this] upside move since they run for cover."
According to the Commodities Futures Trading Commission, total short positions in gold futures have dropped more than 8 percent from July 14, where it hit the highest level in more than two years.
Since reaching its high of just over $1,900 an ounce in September of 2011, gold has been crushed, falling 40 percent over that time while the dollar has rallied. But as mounting global economic uncertainty and Fed jitters have rattled the market of late, investors are once again piling into the precious metal.
On whether or not the selling would resume, Alderman said, "I think we are closer to the bottom than we are to the top," adding, "Currency struggles around the world are leading to QE in many countries" and that should bode well for gold.
Gold closed Thursday above $1,150 an ounce, more than 2 percent higher.