Gold 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.