Overview
Citi informed clients on Tuesday that the most recent uptick in the gold price has pierced notable technical resistance levels, but that the advance appears to be driven mainly by speculative flows rather than broad-based physical buying. The bank highlighted macro and technical drivers behind the move and flagged an upcoming policy speech as a potential turning point.
Market backdrop and technical picture
The bank attributed part of the price lift to a weaker dollar and lower yields following an announcement from the U.S. Treasury that it would increase long-end buybacks. Gold, Citi said, established a firm low near $4,000 an ounce from late June through July, recovered during August and hovered around its 100-day moving average of about $4,380 before registering a breakout.
On technical indicators, Citi noted that the MACD and the DMI are signaling positive momentum, while the relative strength index sits near 72 points - elevated and indicative of stretched conditions but not at extreme readings. Complementing the technical signals, CFTC positioning data show managed money net length is close to year-to-date highs, although still below the peaks seen in 2024-25.
Flows and regional demand patterns
The bank emphasized that much of the recent advance has come from speculative futures inflows during U.S. trading hours, with price action flat to lower in Asian and European sessions. Citi pointed out that physical demand has not matched futures interest so far. In addition, Chinese retail buying remains subdued with investors range-trading rather than following the trend, and Indian premiums continue to be negative.
Event risk - Jackson Hole
Citi described the upcoming Jackson Hole speech by Chair Kevin Warsh as a binary risk for the gold market. A hawkish tone, the bank warned, would likely interrupt the rally, while a dovish surprise would be "ultra-bullish." Citi said it would look to buy any pullbacks into the low $4,000s, reflecting a tactical approach tied to event-driven volatility.
Note: The analysis above reflects Citi's client note and the data points cited therein.