Castle Securities is bullish on gold for the first time this year. The five major catalysts may push gold prices to start a new cycle
Comparing news, Citadel Securities (Citadel Securities) strategist Scott Rubner (Scott Rubner) recommended that investors allocate structured gold 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 said that the upward momentum for gold comes from five major factors: the Federal Reserve's policy is shifting to rising expectations, continued gold purchases by central banks around the world, quantitative fund short recovery, bullish signals from the options market, and the possibility that retail funds previously flowing to AI assets will return back into the precious metals market.
The recent cooling in the US job market has further strengthened the upward logic of gold. The number of people employed in the US fell unexpectedly in July, and the employment data for the previous two months dropped sharply. The market lowered expectations that the Federal Reserve would maintain its austerity policy, weakening the dollar and boosting demand for gold.
Currently, the price of gold remains above 4,300 US dollars/ounce, and the latest transaction price is around 4355 US dollars. Gold prices rose more than 7% last week, the biggest weekly increase since the end of January this year.
Rubner pointed out that as of August 6, the Commodity Trading Advisory Fund (CTA) still holds net short positions in gold and silver. If the price of gold continues to break through, trend trading funds may be forced to make up for bears and switch to buying, further amplifying the upward trend.
Furthermore, there are positive signs in the options market. Castle Securities said that the implied volatility of SPDR Gold Shares (GLD), the world's largest gold ETF, has rebounded, and the bearish/bullish option bias has reversed its extreme level since February of this year, indicating increased bullish sentiment in the market.
At the same time, Rubner stressed that gold purchases by central banks around the world are still an important support for the long-term rise in gold. In particular, the central bank of China continues to increase its gold reserves. In July of this year, the Central Bank of China increased its gold holdings for the 21st consecutive month, further boosting the recovery in demand from the official sector.
He believes that as US fiscal pressure increases, dollar credit discussions heat up, and geopolitical risks persist, the appeal of gold as a reserve asset is increasing. If the upward trend is further confirmed, retail capital, which has been dormant for a long time, may flow back into the precious metals market, providing additional impetus for gold prices.
