Gold posted its first weekly gain in seven weeks after the U.S. dollar weakened in the wake of a speech from the Federal Reserve’s chairman.

Some market analysts are looking to market mechanics—in particular, short positions on gold—for gold’s future direction.

Shree Kargutkar, portfolio manager at Sprott Asset Management, told MarketWatch, “We have seen gold do well following previous spikes in short interest. With over $25 billion of gold being shorted, any meaningful short covering should produce a significant price appreciation in gold.”

In fact, a move toward higher gold prices may already have been anticipated by institutional traders. Respected analyst Tom McClellan, creator of the McClellan Oscillator, points this out in the following chart:

commercial traders of gold futures

The chart, according to McClellan, “shows that the commercial traders of gold futures are now back to about as close to neutral as they can be as a group. Given their historic tendency (since 2001) to stay net short as a group all the time, being neutral is actually a hugely lopsided position. And it should result in a huge rebound for gold prices.”

Rick Andrews is president of Avant Capital Management