Citi: Gold Breakthrough Driven by Speculative Funds, Central Bank Meeting as Risk Point

On August 26, gold has recently maintained a strong position, with increased volatility at high levels. The weakening dollar, falling U.S. Treasury yields, concerns over fiscal deficits, and safe-haven demand support gold prices. However, Citi points out that the breakthrough in gold is primarily driven by speculative funds such as futures, while physical demand has not kept pace. Citi believes this indicates that gold is more sensitive to macro events in the short term. The rise driven by speculative funds can quickly form a trend, but it is also prone to profit-taking when policy expectations change. The market is awaiting speeches from the Jackson Hole global central bank meeting; if the Federal Reserve signals a hawkish stance, the dollar and real interest rates may rebound, putting pressure on gold's upward momentum. Conversely, if the policy statements lean dovish, gold prices may have the opportunity to continue rising. Recent changes in the trading backdrop for gold, including fiscal sustainability, long-term U.S. Treasury yields, and central bank gold purchases, remain mid-term supports, but short-term prices have accumulated considerable momentum funds. For traders, gold is not only a safe-haven asset but is increasingly resembling a macro high-beta asset sensitive to the dollar, real interest rates, and fiscal risks.