Uncertainty May Fuel Gold This Fall | Presented by CME Group

Summary

Gold's late-summer breakout signals that the higher-for-longer strong-dollar narrative is losing credibility. Treasury long-end buybacks, large deficits and softer July labor data revived currency-debasement concerns and reduced aggressive Fed hike expectations, weakening the dollar. Central bank buying and geopolitical risk add support, leaving traders positioned for a messier fall policy environment in which gold is attractive as both a hedge and a monetary asset.

• Gold rallied late in the summer after a rangebound stretch.
• Treasury long-end buybacks and growing deficits revived currency-debasement concerns.
• Softer July labor data tempered aggressive Fed hike expectations.
• The dollar weakened and money flowed back into gold.
• Central bank demand and Iran geopolitical risk added support.
• Gold is no longer seen as having to fall just because real yields are high.
• Traders expect a messier fall environment with sticky inflation and fiscal pressure.