Gold prices rebound strongly! Can they reclaim their all-time high? These four core drivers are regaining strength! [Gold · EP02]

In our previous article, 'Gold Is Not a “War Insurance Policy,”' we discussed a phenomenon: when geopolitical risks escalate, gold doesn’t necessarily rise. The current market, however, presents an even more intriguing question.

Over the past few days, international gold prices have staged a strong rebound. Spot gold posted a single-day gain of up toexceed 4%, marking its largest one-day increase in several months; following a notable prior pullback, gold has reclaimed the USD 4,300level this week, with a cumulative rebound ofAbove USD 250。

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If a month ago the market was still asking, "Has gold run out of steam?"

then the question now has become: "Can gold rally back?"”

No one can predict prices in advance. However, an increasing number of signs suggest that the key forces driving gold’s previous rally have not disappeared—and some are even regaining strength.

📉 Macro backdrop: Shifting rate expectations create room for a rebound

This recent rally could easily be interpreted as a short-lived safe-haven move, especially since market attention remains focused on developments in the Strait of Hormuz and the broader Middle East. Yet, according to conventional logic, as markets begin anticipating restored navigation, safe-haven sentiment should cool—but gold has instead risen against this backdrop. This suggests investors aren’t just buying gold for safety; they appear to be reassessing itslong-term allocation value。

The most critical driver stems from a reversal in macro timing. Recently, the U.S. July ADP employment report showednational private-sector employment increased by only 44,000 jobs, significantly below expectations, reigniting market discussions about an economic slowdown.

Following the data release, U.S. Treasury yields retreated and the dollar weakened in tandem. CME FedWatch data shows that investor bets on maintaining rates unchanged in the future have risen significantly. Gold itself does not generate interest, sowhen macro expectations for interest rates begin to decline and the opportunity cost of holding gold falls, gold’s relative attractiveness naturally increases, creating a strong macro backdrop for a rebound in gold prices.

💰Funding Structure One: Accelerated return of Chinese and long-term capital bolsters market momentum

Against the backdrop of shifting macro sentiment, capital at the micro level is backing gold with real money.

Goldman Sachs’ commodities research team believes that renewed participation by Chinese investors in the gold market has been one of the key catalysts behind the recent rally in gold prices. Data shows that open interest in Shanghai gold futures rose by approximately19,000 lots in a single day,，an increase of about 6%,marking one of the largest single-day increases in open interest in nearly three years. Meanwhile, Chinese gold ETFs have recorded consecutive net inflows.

Notably, amid the volatile rebound, both institutional and retail investors are showing a preference for instruments offering 'high certainty,' with physically backed gold ETFs—capable of tracking spot gold prices at 100%—gradually becoming a popular choice.

For example, on platforms such as Futu, which support multi-counter trading in Hong Kong dollars, renminbi, and US dollars,Value Partners Gold ETF (3081.HK)has recently regained attention from many rational investors due to its underlying assets being 100% physically stored in a vault at Hong Kong International Airport.Fund flows often reflect market sentiment earlier than price itself, and previously hesitant retail and institutional capital is now returning.。

🏛️Capital structure factor two: Strategic gold purchases by global central banks reinforce the medium- to long-term floor.

If retail and institutional capital determines short-term gold price elasticity and trading activity, thenofficial global capital sets the medium- to long-term support floor for gold prices.。

Just as the market revisits gold, the Bank of Korea announced it would resume gold reserve allocations. This marksthe first time since 2013，that the Bank of Korea has restarted its physical gold purchasing program after a 13-year hiatus.In terms of scale, this purchase isn't particularly large, but central banks typically represent the longest-term and most stable form of capital. The Bank of Korea's decision to reallocate into gold at this juncture carries strong benchmark significance for the industry.

In fact, the trend of global central banks maintaining a positive long-term outlook on gold has never changed. According to World Gold Council data, this yearcentral banks globally recorded net gold purchases of 288.9 tonnes in the second quarter,，a 62% year-over-year increase,reaching a record high for the same period in history. Countries such as Poland and China continue to steadily increase their gold reserves.

This indicates that even after significant gains in gold prices, official long-term investors have not abandoned allocations simply because prices are at elevated levels.This sustained strategic demand from official institutions is providing robust medium- to long-term support and a solid floor for the gold market.。

🔍The market discusses the Strait, yet pricing may hinge on more than just the Strait.

Many recent analyses of gold begin with the Strait of Hormuz. However, a review of institutional perspectives reveals that what the market truly cares about extends beyond the Strait itself.

Because:Strait impacts oil prices ➡️ oil prices affect inflation ➡️ inflation influences interest rates ➡️ and interest rates further impact gold.。

Thus, the same geopolitical news item could lead to entirely different market outcomes. Rather than focusing on whether cross-strait shipping routes will resume, what may be more worth watching is:What changes are unfolding in the capital structure underpinning the gold market. Recent observations suggest that interest rate conditions, capital flows, and central bank allocation behavior are all beginning to shift in a direction more favorable for gold.

📊Final thoughts

Gold has certainly not yet returned to its previous all-time high. These signals do not necessarily mean gold will immediately reclaim that peak, but they do indicate one thing clearly:The core drivers that supported gold’s last rally have not disappeared。

Following the significant correction seen earlier, some of these forces are now re-strengthening. For investors, this may be more worthy of attention than day-to-day price fluctuations.

💬[Discussion Topic]

If gold prices climb back toward recent highs, would you plan to add positions on dips or continue to stay on the sidelines? Share your thoughts in the comments below!

Sources: Reuters report from August 2026 on geopolitical developments and gold market reactions; U.S. ADP Employment Report and CME FedWatch Tool data as of August 5, 2026; Goldman Sachs commodity research report and Shanghai Futures Exchange position statistics from August 2026; Bank of Korea’s announcement on resuming gold purchases in early August 2026; World Gold Council’s 'Gold Demand Trends Q2 2026' published July 30, 2026; Prospectus of Value Partners Gold ETF (3081.HK).

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