Gold is regaining upward momentum. Scott Rubner, a strategist at Citadel Securities, has recommended investors allocate structural positions in gold for the first time since 2025, stating that the precious metals market is forming "one of the most attractive upside opportunities in months."
Rubner believes gold and silver are simultaneously benefiting from multiple positive factors, including a shift in Federal Reserve policy expectations, continued central bank gold purchases, quantitative funds maintaining short positions, bullish signals from the options market, and the potential return of retail capital previously attracted to AI trading. In his view, these factors are creating a rare convergence, potentially ushering in a new phase of growth for precious metals.
Recent cooling in the U.S. job market has become a key catalyst for gold's rise. Data shows that U.S. employment figures unexpectedly declined in July, while job gains for the previous two months were significantly revised downward. The weakening labor market has lowered expectations for further Fed rate hikes, weakening the dollar and boosting demand for gold. Gold is currently stable above $4,300 per ounce, with the latest trading price around $4,355. Last week, gold surged more than 7%, marking its largest single-week gain since late January. Since gold does not generate interest, it typically faces pressure in high-rate environments. However, as markets reprice Fed policy expectations, gold's appeal has clearly increased. Rubner stated that the market is currently repricing the future path of Fed policy, and a weaker dollar will further strengthen the bullish case for gold.
Beyond macro factors, the market's capital structure is also tilting toward gold. Rubner analyzed that, as of August 6, Commodity Trading Advisor (CTA) funds still held net short positions in gold and silver. While short positions are often seen as a source of price pressure, in the context of gold's sustained strength, these positions could drive future upside momentum. If gold prices continue to break out, trend-following funds may be forced to cover shorts and turn to buying, fueling further market gains.
Meanwhile, the options market is also sending positive signals. Citadel Securities noted that the implied volatility of the world's largest gold ETF, SPDR Gold Shares (GLD), is rising, and the put/call skew has reversed to its most extreme level since February, indicating that investors are increasing upside positioning. The silver market is showing similar changes, with volatility and options structure in the iShares Silver Trust beginning to reflect a repricing of upside risk.
Additionally, global central bank gold purchases remain a crucial foundation for gold's rise. Rubner specifically highlighted the Chinese market, stating that China's gold buying is accelerating and boosting global official sector demand. Official data shows that China has been increasing its gold purchases since December 2024. In July, the People's Bank of China continued to add to its gold reserves, marking the 21st consecutive month of purchases, with an increase of approximately 640,000 ounces during the month. Chinese gold ETFs have also seen sustained inflows recently, indicating that investors are using price adjustments to reposition. Against the backdrop of rising U.S. fiscal pressures, discussions about the dollar's creditworthiness, and ongoing global geopolitical risks, gold's appeal as a reserve asset is further enhanced.
Rubner believes another potential catalyst for the precious metals market comes from the return of retail capital. Over the past year, AI-related assets have attracted significant investment capital, while gold and silver have seen reduced attention from retail investors. However, if gold's upward trend is further confirmed, some capital may flow back into precious metals. "Precious metals were previously sidelined by the AI trading frenzy. If upward momentum forms, retail participation could accelerate again," Rubner said. He noted that the gold rally from January to February this year demonstrated that retail capital can quickly become a significant incremental buyer.
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