Gold’s recent breakout above its 100-day moving average of roughly $4,380 has been primarily fueled by speculative activity, particularly through futures inflows, according to Citi. The bank noted that while prices consolidated near the $4,000-per-ounce level from late June through July before rebounding in August, physical demand has yet to match the momentum.
Citi’s analysis indicates that managed money net length, as tracked by Commodity Futures Trading Commission data, has approached year-to-date highs but remains below peaks seen in 2024-25. Technical indicators such as the Relative Strength Index, MACD, and DMI remain positive, though the RSI is near 72, suggesting stretched but not extreme conditions. The bank has indicated a willingness to buy dips in the low $4,000s.
The rally has coincided with a weaker U.S. dollar and reduced long-term Treasury yields, following the U.S. Treasury’s announcement of expanded long-end buybacks. However, gains have been concentrated during U.S. trading hours, with prices flat to lower in Asian and European sessions. Chinese retail demand remains subdued, with investors adopting a range-trading approach rather than following a clear trend, while Indian premiums remain negative.
Citi views the upcoming Jackson Hole symposium as a critical inflection point. A dovish surprise, particularly from Federal Reserve Chair Kevin Warsh, could prove "ultra-bullish" for gold, while a hawkish outcome would likely stall the rally. The bank describes the event as a binary risk, emphasizing that the sustainability of the current advance hinges on broader market participation beyond speculative flows.
