In the Asian session on Monday, August 24, spot gold is trading near the $4,640 mark, posting a near 1% gain for the day. Gold has delivered a stellar performance since the start of August, rebounding roughly $600 from the $4,040 zone for an approximate 15% surge, securing a third consecutive weekly rise. The core drivers include an expanded U.S. Treasury buyback program, a softening U.S. dollar, and falling long-end yields, while growing concerns over the long-term valuation of dollar-denominated assets have further reinforced gold's appeal as a portfolio allocation. Short-term bullish sentiment remains firmly in play.
Above the $4,600 level, fresh international bullion buyers are flooding into the market—but this time, "entering" and "profiting" are two entirely different matters. On August 24, London spot gold climbed past $4,630 per ounce, while COMEX gold futures touched an intraday high of $4,713.8. August's cumulative gain now exceeds 13%, with a single-week surge of roughly 5%. Gold is experiencing a rare one-sided squeeze rally, and the driving force is not traditional safe-haven demand but positioning dynamics.
The new wave of bulls originates from three distinct sources. First, CTA trend-following funds have seen their previously accumulated short positions hit by mass stop-losses, forcing a passive shift from short-covering to long-building, creating a textbook "short squeeze." Second, speculative capital that missed the initial leg higher now faces the pressure of "chase or miss out," leaving room for further short-covering. Third, ETF inflows have remained positive for two consecutive months, with seven major commodity gold ETFs attracting a combined 6.861 billion yuan since August alone. Among them, the Huaan Gold ETF has drawn a dominant 5.45 billion yuan, pushing its total assets under management past the 107.7 billion yuan threshold.
Bridgewater founder Ray Dalio has directly advocated allocating 10%-15% of one's portfolio to gold as a hedge against a potential U.S. debt crisis within the next three years. The medium-to-long-term thesis indeed holds water: global central banks purchased a net 289 tonnes of gold in the second quarter, a staggering 62% year-on-year increase, with the People's Bank of China extending its buying streak to 21 consecutive months. Furthermore, 74% of surveyed central banks anticipate a decline in the dollar's share of global reserves over the next five years. On August 19, the U.S. Treasury doubled its long-dated bond buyback program to $4 billion, coinciding with the federal debt surpassing the $40 trillion mark. Gold thus benefits from a "dual-path" advantage—if the buybacks prove effective, real interest rates fall; if they falter, fiscal credibility erodes. Both scenarios are supportive for bullion prices.
Yet the difficulty of chasing this rally is escalating exponentially. For starters, gold has already rebounded about $300 from its July low, with the Relative Strength Index (RSI) climbing to one of its highest levels in recent years—a clear technical overbought signal. Additionally, this week is a "data-plus-event" double whammy: August 26 brings the July PCE reading, while August 28 marks Warsh's Jackson Hole debut. Any hawkish rhetoric aimed at curbing inflation could trigger a repricing of rate-hike expectations, exposing gold to its most volatile stretch in weeks.
Market participants are broadly aligned in their assessment: the easiest "catch-up rally" phase is over. While a fresh leg driven by momentum-chasing capital may be just beginning, the risk-reward profile has deteriorated sharply. The $4,630-$4,650 zone, a former resistance cluster, carries heavy overhead supply, making blind chasing an extremely poor trade. The $4,450-$4,500 range serves as the key bull-bear battleground. Waiting for the PCE data and Warsh's speech to land, allowing risk-off sentiment to unwind, before strategically positioning is far more prudent than going naked long above $4,600.
The influx of new bulls is a fact, but "entering" does not equate to "chasing now." The cracks in fiscal credibility will not mend within a month, yet the market never lacks violent shakeouts triggered by central bank communications. Until Warsh speaks, keeping your hands steady is smarter than reaching for the trigger.
On the technical front, gold has continued its upward push after an initial rapid spike-and-reverse washout at the open, with the live-trade long entry near the $4,604-4,605 zone yielding profits. On the 4-hour chart, price has broken above the prior high-level consolidation range, with the K-line maintaining a steady uptrend along the short-term moving averages. The immediate focus is on whether a pullback-and-repair phase precedes a second upside push, with resistance eyed in the $4,690-$4,700 band. On the smaller timeframes, the continuous advance keeps price above the short-term moving averages in a firm stance, though near-term consolidation and repair dynamics warrant close monitoring.