--- title: "Gold Poised for Breakout After Consolidation" type: "News" locale: "en" url: "https://longbridge.com/en/news/295157981.md" description: "On August 5, London spot gold surged over 4% in a single day, breaking through $4,200 per ounce and extending its upward momentum. Although common catalysts such as easing geopolitical tensions, exchange rate interventions, and non-farm payroll data have shown time lags or divergences from gold price performance, analysts believe the underlying logic of this rebound lies in: falling inflation expectations, rising term premiums on US Treasuries, and a weakening US dollar; the decoupling of gold from US Treasury yields due to support from non-market buyers like central banks; a technical breakout from a descending wedge pattern; and capital rotation into gold following volatility in tech stocks" datetime: "2026-08-06T23:56:50.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/295157981.md) - [en](https://longbridge.com/en/news/295157981.md) - [zh-HK](https://longbridge.com/zh-HK/news/295157981.md) --- # Gold Poised for Breakout After Consolidation **Core Viewpoint** **Event: On August 5, London spot gold surged over 4% in a single day, breaking through $4,200 per ounce, and continued its upward trend in early trading today; London spot silver also rose over 4% in a single day, breaking through its one-month high.** **Regarding the recent strength in gold and other precious metals, there are various possible explanations and catalysts in the market. However, from a timing perspective, they do not seem to align precisely with gold's price performance:** ① Expectations of easing geopolitical tensions served as a trigger. The chain of logic—falling oil prices → cooling inflation risks → alleviated expectations of liquidity tightening—is easy to understand. However, gold performed mediocrelly during August 3–4, when oil prices dropped most sharply. ② Joint intervention in exchange rates by the US, Japan, and South Korea led to a decline in the US Dollar Index from high levels, directly benefiting gold prices. However, during the week of intervention (July 27–31), the US Dollar Index fell by 1.66%, while gold prices declined instead of rising. ③ At the July FOMC meeting, Warsh's stance was relatively dovish, but concerns increased regarding the Federal Reserve lagging behind the curve and its independence. Uncertainty surrounding Warsh's reforms and the rise in US Treasury term premiums may have somewhat strengthened the safe-haven demand for gold. However, a week has passed since the FOMC meeting, and gold prices only rose slightly on the day of the meeting. ④ On August 5, the US released July's "small non-farm" data (ADP employment change), which fell to a six-month low of 44,000 (Bloomberg consensus expectation: 70,000). However, changes in US Treasury yields were limited, and we believe this was insufficient to trigger a significant rise in gold prices. **We believe that falling inflation expectations + rising US Treasury term premiums + a weakening US dollar did indeed create a favorable environment for gold. However, this rebound may be supported by more fundamental logic:** **① Since July, gold has begun to "decouple" from US Treasury yields. In situations where US Treasury yields hit new highs, gold prices no longer continue to fall, which may indicate a change in underlying capital behavior, possibly with non-market buyers such as central banks playing a supporting role.** For example, since June, the People's Bank of China has accelerated its gold purchases again, and the Bank of Korea just announced the resumption of gold purchases after 13 years. **② Technically, gold has completed the pattern formation from a W-bottom construction to a breakout from a descending Wedge.** Taking London spot gold as a reference, gold first constructed a W double bottom near 3,950 in late June and mid-July. After attempting to break the downward trend line since January on July 22 and pulling back, it firmly regained the trend line on July 29. The large bullish candle on August 5 fully confirmed the breakout from the descending Wedge. **③ From a cross-asset perspective, following the recent severe volatility in tech stocks, the demand for capital rotation has intensified.** Gold and similar varieties, with sufficient clearing of positions (COMEX non-commercial net long positions returning to 2024 levels) + volatility falling to low levels + favorable technical patterns, are expected to attract more capital. **④ In terms of long-term trends, our compiled fiat currency credit factor year-on-year (the stronger the fiat currency credit, the weaker the reading) has recently fallen to near zero. Historically, there is limited room for further decline.** Considering that long-term factors driving gold prices higher—such as fiscal sustainability in the US and other countries, reshaping of geopolitical order, and central bank independence—have not reversed, we believe that the recent underperformance of gold relative to fiat assets like US Treasuries may be nearing its end. **Outlook** **In the short term, following the severe volatility in tech stocks, some capital is attempting to find opportunities outside the AI main theme.** Considering the difficulty for the AI chain to reach new ATH (All-Time High) s, if the rebound in tech stocks continues, the demand for capital rotation may even increase rather than decrease. As the correlation between gold and US Treasury yields declines and the technical breakout is completed, we believe gold prices have basically moved out of the weak range. Against the backdrop of capital rotation, gold possesses unique allocation value, with gold stocks offering better elasticity; similar varieties may include small and micro-cap stocks and software sectors. However, attention should still be paid to the non-farm payroll data this Friday and subsequent statements by Warsh at Jackson Hole, which may disturb gold prices. In the medium to long term, structural issues such as the restructuring of geopolitical order, reserve diversification and central bank gold purchases, US debt sustainability, and Federal Reserve independence provide bottom support for gold. However, as global central banks gradually enter a hiking cycle, the center of US Treasury yields may be "easy to rise but hard to fall," and the US dollar is unlikely to continue weakening sustainably. We remain cautiously optimistic about the upside space for gold prices. Risk Warning and Disclaimer The market carries risks, and investment requires caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial status, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. 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