Gold Breaks Above $1300 As Shorts Cover Most In 4 Months

Almost 11% of short gold positions covered in the last week according to CFTC Commitment of Traders' data. That is the largest weekly drop in net shorts for four months and the combined futures-and-options net long position jumped 13,287 contracts or an impressive 48% (the most since Nov 08). Following the ubiquitous "sell-while-Bernanke-is-speaking" dump last Wednesday gold has risen almost 4% touching $1320 this evening as Asia opens. So with Asian physical demand remaining high and COMEX vault's running dry (and JPMorgan's on fire), we wonder - now that Taper is off (according to equity market pundits) if this is the start of the long-awaited short-covering rally back to reality for the precious metal.

Big short-covering in gold last week...

and gold is breaking back above $1300...

Charts: Bloomberg