Castle Securities Turns Bullish on Gold for the First Time This Year, Five Catalysts May Drive Gold Prices into a New Cycle

On August 10, strategist Scott Rubner recommended investors allocate to gold structured positions for the first time since 2026, believing that the current precious metals market is forming one of the most attractive upward opportunities in months.

Rubner stated that the upward momentum for gold is driven by the resonance of five major factors: rising expectations for a shift in Federal Reserve policy, continued gold purchases by global central banks, short covering by quantitative funds, bullish signals from the options market, and the potential return of retail funds that previously flowed into AI assets back into the precious metals market.

Recently, the cooling of the U.S. job market has further strengthened the logic for rising gold prices. In July, U.S. employment unexpectedly declined, and the employment data for the previous two months was significantly revised down, leading the market to lower expectations for the Federal Reserve to maintain a tight policy, which weakened the dollar and boosted gold demand.

Currently, gold prices are holding above $4,300 per ounce, with the latest trading price around $4,355. Last week, gold prices rose over 7%, marking the largest weekly increase since the end of January this year.

Rubner pointed out that as of August 6, commodity trading advisor funds (CTAs) still held net short positions in gold and silver. If gold prices continue to break through, trend-following funds may be forced to cover shorts and shift to buying, further amplifying the upward trend.

Additionally, the options market is also showing positive signals. The implied volatility of the world's largest gold ETF has rebounded, and the skew of put/call options has reversed to extreme levels not seen since February of this year, indicating an increase in bullish sentiment in the market.

Rubner also emphasized that the continued gold purchases by global central banks remain an important support for the long-term rise of gold, especially as the People's Bank of China continues to increase its gold reserves. In July, the People's Bank of China achieved its 21st consecutive month of increasing gold holdings, further boosting demand from official sectors.

He believes that as U.S. fiscal pressures increase, discussions about dollar credit heat up, and geopolitical risks persist, the attractiveness of gold as a reserve asset is rising. If the upward trend is further confirmed, the long-dormant retail funds may flow back into the precious metals market, providing additional momentum for gold prices.