For the seventh consecutive week, hedge funds have continued to invest in gold, according to the latest trading data from the Commodity Futures Trading Commission.

According to some analysts, the gold market continues to benefit from the change in expectations regarding interest rates in the U.S., which weakens the U.S. dollar. Everyone is currently waiting for the Federal Reserve to further slow down the pace of its rate hike by 25 basis points next month.

The expected end of the Federal Reserve's aggressive tightening cycle has sent the U.S. dollar index down to a seven-month low.

At the same time, gold prices are trading near a nine-month high, with prices holding initial support above $1,900 an ounce.

According to the CFTC's disaggregated Commitments of Traders report, money managers at Comex increased their speculative long positions on gold futures by 7,618 contracts to 124,222. At the same time, short positions rose by 50 contracts to 54,845.

However, while the market is still healthy bullish, some analysts see signs that the precious metal is entering a consolidation phase.

At the same time, the U.S. dollar is oversold.

And further sluggish investment demand for gold-backed exchange-traded funds may suggest that the rally is running out of steam.

Commodity analysts at TD Securities also warn of a potential spike in gold prices as the Chinese market is closed this week for Lunar New Year celebrations.

While the gold market continues to attract speculative investor interest, the silver market is struggling to keep up.

Comex speculative long positions in silver futures rose 1,215 contracts to 46,115 contracts, while short positions fell by 2,019 contracts to 19,647 contracts, according to the disaggregated report.

Silver now has a net length of 26,468 contracts. The bullish position is holding near an eight-month high.

Growing fears that the U.S. is heading for a recession are putting pressure on the precious metal, some analysts say; however, silver also lags behind other industrial metals such as copper.

The COT report showed that Comex speculative long positions in copper futures rose 9,388 contracts to 72,421. At the same time, short positions rose 2,845 contracts to 39,467.

Copper's net length is now at 32,954 contracts, the highest level since early April. During the survey period, a solid bullish speculative stance drove prices to a seven-month high above $4.20 a pound.