Gold Is Surging Again — What’s Driving the Rally, and Can It Go Even Higher?
Gold has staged a powerful rally over the past week. Yesterday, spot gold climbed as much as 1.7%, breaking above $4,680 per ounce and reaching its highest intraday level since mid-May.
Gold stocks and related ETFs have also benefited from the rally. Over the past week, Newmont (NEM), ProShares Ultra Gold (UGL), and Agnico Eagle Mines (AEM) have all recorded strong gains.$纽曼矿业(NEM)$$2倍做多黄金ETF-ProShares(UGL)$$伊格尔矿业(AEM)$
So what is driving this latest surge? In my view, there are four main reasons.
1. The U.S. Treasury’s Expansion of Long-Term Bond Buybacks
Last week, the U.S. Treasury unexpectedly announced that it would at least double the size of its long-term Treasury buybacks. Gold responded immediately, rising more than 5% over the week.
2. Renewed Fears of Currency Debasement
The Treasury’s efforts to intervene in the bond market and contain U.S. borrowing costs have revived concerns about inflation and long-term dollar weakness. This has brought the so-called “debasement trade” back into focus—the same narrative that helped drive gold up 65% in 2025.
3. Hedging Against a Potential U.S. Debt Crisis
Billionaire investor Ray Dalio said last week that investors should reduce their bond exposure and allocate as much as 15% of their portfolios to gold as a hedge against a potential U.S. debt crisis, which he believes could emerge within roughly three years.
Growing concerns about the sustainability of U.S. debt could encourage more investors to increase their strategic allocations to gold.
4. Dollar Weakness, Rising Long Positions and Narrowing Spreads
Investors have been building hedges against the risk of a prolonged decline in the U.S. dollar, helping gold deliver a strong performance this month.
A sharp increase in fund managers’ net-long positions and a narrowing spread between spot gold and the futures curve have provided further support.
How Much Further Can Gold Rise?
Citi has raised its three-month gold price target to $4,800 per ounce while maintaining its six-to-12-month target of $5,000. The bank believes falling real interest rates and a less hawkish Federal Reserve will continue to support gold.
However, the recent rally has largely been driven by speculative demand, particularly inflows into gold futures. Physical demand in China and India remains weak.
Citi warned that physical demand will need to catch up if the rally is to remain sustainable. Federal Reserve Chair Kevin Warsh’s upcoming speech at Jackson Hole could also create two-way risks. If Warsh adopts a hawkish tone, the speculative nature of the latest rally could leave gold vulnerable to a rapid correction.
Gold has now risen 16% since the beginning of August and traded close to $4,680 per ounce on Tuesday morning.
Based on the current situation, I believe gold still has room to rise over the longer term. The impact of the Treasury’s expanded bond-buyback programme remains significant, while the U.S. Dollar Index continues to hover near relatively low levels.
Gold ETF Picks
1. IAUM — A Low-Cost Long-Term Holding
The iShares Gold Trust Micro provides direct exposure to physical gold. It charges a sponsor fee of just 0.09% and has approximately $7.98 billion in net assets, making it suitable for investors seeking low-cost, long-term gold exposure.$ISHARES GOLD TRUST MICRO(IAUM)$
2. GLD — Best Suited for Active Trading
SPDR Gold Shares also tracks physical gold. It charges an expense ratio of 0.40% and has approximately $154.2 billion in net assets.
Its enormous scale, deep liquidity and active options market make it particularly suitable for short-term trading. GLD has delivered an annualised return of approximately 12.9% over the past decade.$黄金ETF-SPDR(GLD)$
3. GDX — Higher-Beta Exposure Through Gold Miners
The VanEck Gold Miners ETF invests in major gold producers including Newmont, Agnico Eagle and Barrick Mining.
Higher gold prices can expand miners’ profit margins, meaning GDX generally offers greater upside sensitivity than gold itself. However, it also carries company-specific risks, rising production costs and broader equity-market exposure.
GDX has an expense ratio of 0.51%, approximately $32.03 billion in net assets, and a 10-year annualised return of around 14.4%.$黄金矿业ETF-VanEck(GDX)$
4. UGL — Two-Times Leveraged Gold Exposure
ProShares Ultra Gold uses gold futures and swaps to target twice the daily performance of gold.
It is designed for aggressive investors with a short-term bullish view and is not suitable as a long-term holding because of daily leverage resets, compounding effects and financing costs.
UGL has approximately $919 million in net assets, an expense ratio of 0.95%, and a 10-year annualised return of around 17.9%.$2倍做多黄金ETF-ProShares(UGL)$
5. SHNY — Three-Times Leveraged Gold ETN
The MicroSectors Gold 3X Leveraged ETN targets three times the daily performance of GLD.
SHNY charges an annual investor fee of 0.95% and has approximately $114.1 million in market capitalisation. It is an extremely short-term vehicle for speculating on rising gold prices—not a product for long-term gold allocation.$MICROSECTORS GOLD 3X LEVERAGED ETN(SHNY)$
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