Gold markets at home and abroad have been on a powerful upward trajectory since the start of August, with prices repeatedly breaking through key psychological levels. On August 24, international gold prices climbed once more, with London spot gold trading at $4,643.62 per ounce as of press time, up 0.89% on the day and briefly hitting an intraday high above the critical $4,600 per ounce mark.

Futures markets followed suit, with COMEX gold futures rising 0.4% intraday to $4,699.5 per ounce, touching a session peak of $4,716.7 per ounce — showing greater resilience than spot gold. Notably, this rally carries distinct trend characteristics, as international gold prices broke through three major thresholds of $4,400, $4,500, and $4,600 per ounce last week, marking a three-month high. According to Wind data, London spot gold has surged over 15% in the 16 trading days since August, reflecting exceptionally strong momentum.

Meanwhile, domestic gold prices have reclaimed the 1,000 yuan per gram milestone. By the close of trading on August 24, the Shanghai Gold Exchange's Gold T+D contract jumped 2.66% to 1,003.84 yuan per gram, while the Shanghai Futures Exchange's gold futures main contract rose 2.86% to 1,006.82 yuan per gram.

Multiple Positive Factors Converge

Commenting on the strength of gold prices since August, Xiao Jingyu, precious metals researcher at Xinhua Futures, noted, "This rally is not driven by a single factor but is the result of a convergence between macroeconomic pricing logic and deep cracks in the credit currency system."

Xiao pointed out that from a macro pricing perspective, the weaker-than-expected July US non-farm payroll report, continued declines in inflation, and negative retail sales data have brought market expectations for further Federal Reserve rate hikes this year down to around just one. Falling real interest rates have fueled a sharp rebound in precious metals prices, led by gold.

On the dollar credit system front, cracks are emerging across multiple dimensions, Xiao said. First, trust in the Fed's independence is wavering. Following the late-July FOMC meeting, Fed Chair Warsh's contradictory wording at the press conference was widely interpreted by the market as "hawkish in appearance but dovish at heart," which materially damages the Fed's long-term credibility. Second, long-term government bond yields in major developed economies have spiked sharply recently, with risk premiums on long-term sovereign debt in the US, Japan, the UK, and France widening significantly. This reflects that investors demand higher compensation for holding long-term sovereign bonds, while bond demand continues to shrink — indirectly confirming waning confidence in sovereign credit, which consistently supports gold as the inverse anchor of sovereign credit. Third, central bank gold purchases are providing solid underlying support. Emerging market nations are steadily increasing their gold reserves, with China's central bank buying gold for 21 consecutive months, recently accelerating its pace and displaying a classic "buy more on dips" pattern. At the same time, the buying camp is expanding, with South Korea's central bank resuming gold allocation after 13 years. Such strategic allocations focused on long-term risk resilience further confirm that global official sectors are revaluing gold's strategic importance.

Liu Youhua, research director at PaiPaiWang Wealth, added further catalysts for this rally. First, US non-farm payrolls unexpectedly fell by 23,000 in July, and with inflation cooling moderately, market expectations for a September Fed rate hike have rapidly diminished, lowering the opportunity cost of holding gold and directly benefiting prices. Second, the dollar's credit foundation continues to weaken — the US Treasury doubling its long-term bond buyback scale to $40 billion per month has been interpreted by the market as "stealth QE," and with total US debt surpassing $40 trillion, the dollar's credit anchor is being shaken. The dollar index keeps sliding, further enhancing gold's pricing advantage. Third, the global central bank strategic gold-buying wave persists, with net purchases of 289 tonnes in Q2, up 62% year-on-year and setting a record high for the second quarter, as long-term strategic buying builds a solid floor under gold prices.

Recovery Rally Expected to Continue

Looking ahead, how will the gold market unfold? Xiao believes that in the short term, Warsh is highly likely to use this week's Jackson Hole global central bank symposium to clarify policy direction and repair the Fed's damaged credibility. Should his remarks deliver an unexpectedly hawkish signal, gold prices could face some short-term pressure.

From a medium-term perspective, London spot gold has now broken above the key $4,500 level, and Xiao maintains her year-end target of $5,000 per ounce. With the twin narratives of falling rate hike expectations and rising sovereign credit risk, gold's valuation recovery rally still has room to extend. Over the long term, she remains optimistic on the precious metals sector. On one hand, global sovereign credit risk continues to rise, and coordination between US fiscal and monetary policy is likely to strengthen, with the path of fiscal expansion difficult to reverse. Notably, massive military spending in the Middle East adds short-term fiscal pressure, while US debt exceeding $40 trillion continues to erode dollar credibility, reinforcing the long-term de-dollarization logic and providing structural support for precious metal prices. On the other hand, geopolitical uncertainty remains elevated — potential US-Israeli military action against Iran makes the Middle East situation more complex, while regime changes in France, Germany, Japan, and other major economies, along with the spread of far-right ideologies, reflect widening cracks in the old international order. This risk-prone macro environment also favors gold's long-term allocation value.

In the medium to long term, Liu Youhua believes gold's long-term allocation value remains solid. Concerns over dollar credit stemming from US debt surpassing $40 trillion, sustained global central bank gold purchases, and the restart of "de-dollarization" trades collectively underpin gold prices. However, short-term market divergence is intensifying — gold's substantial gains in August have created overbought technical conditions and profit-taking pressure. This week, close attention should be paid to Fed Chair Warsh's remarks at the Jackson Hole symposium and the core PCE data.

Given the current high-level volatility in the gold market, Liu proposes three practical investment recommendations. First, control position size and allocation ratios. Treat gold as the "ballast stone" of a household asset portfolio, keeping the allocation at a reasonable level, and avoid heavy positioning or blindly chasing highs. Second, choose optimal investment vehicles. Prioritize gold ETFs with low premiums and high liquidity, or bank investment-grade gold bars, while avoiding gold jewelry that carries high processing fees and brand premiums. Third, stick to a strategy of phased accumulation on dips. Abandon the illusion of perfectly timing the bottom, and instead adopt a systematic approach such as regular fixed-amount investing or adding positions at key support levels to smooth out costs.