2025 gold price rally and US investor confidence
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US consumer confidence falls in August as gas prices stay above $4
The Conference Board's consumer confidence index dipped to 89.4 in August from 90.2 in July.
The PCE price index was down from May's 4.1% year-over-year increase.
The Federal Reserve's PCE price index was up 3.7% in June from a year earlier.
Gold price hits three-month high
Tony Sycamore, a market analyst at IG, said he expects dips in gold to be well-supported from buyers looking for gold to move toward $4,900/$5,000.
Gold topped $4,000 an ounce for the first time last October and passed $5,000 in January.
Gold reached $4,651 an ounce during Asian trading hours on Tuesday before falling back slightly.
“Looking ahead, we expect dips in gold to be well-supported from buyers looking for gold to make its way towards the next upside resistance at $4,900/$5,000,”
Gold hits three-month high on dollar weakness and Treasury buyback plans
Citi said a dovish surprise at Jackson Hole will be ultra-bullish for gold.
The dollar index has lost 0.8% so far in August.
Citi said a hawkish Warsh speech will likely bring the ongoing gold rally to a halt.
“as the market will not only continue to price out Fed rate hikes but also refocus on the debasement trade amid renewed concerns on Fed independence and US debt sustainability issues,”
Massive options trade in gold
The trader then bought the same number and expiry of 430-strike calls for $144 million, creating a $58 million net credit.
Volume in the GLD ETF was on pace for almost 5x the 30-day average.
The breakeven point at expiry for the trade is $425.
“Momentum-crowd flows remain very bullish but smart-money flows have turned negative. GLD has already seen about $60 million of negative net money flow today.”
Gold rally driven by lack of investor confidence; silver may offer bigger gains
Michele Schneider said a move above roughly $64 an ounce in the September silver futures contract could trigger a rapid advance toward $75, with the potential to reach $80.
Michele Schneider said the real spark that ignited gold's powerful breakout came from Japan's currency intervention.
Gold had been consolidating around $4,000 an ounce for the two months prior to the rally.
“This volatility is already the breakdown of the perception... Nobody knows what officials are doing. Nobody knows what to believe. Let's just sell the market. But there’s one thing we know that everybody's buying and we can go anywhere with is gold.”