At a Glance
Citi cuts gold exposure after shifting toward a more hawkish Fed outlook.
Gold remains under pressure despite resilient ETF inflows and central-bank buying.
China added 650,000 troy ounces in August, extending its buying streak to 22 months.
Jeff Currie calls Treasury buybacks a long-term bullish signal for gold.
Hotter inflation and higher rates remain key risks for bullion.
Gold’s Bull Run Hits a Fed Roadblock
Gold traders are facing a tougher policy backdrop after Citi reduced its gold exposure, citing a more hawkish Federal Reserve outlook. The move comes as investors weigh higher U.S. rates against strong central-bank demand and continued concerns over currencies and fiscal stability.
Key Details
Citi had previously built long gold positions on expectations of a dovish Fed and a U.S. Treasury buyback announcement. After the Jackson Hole symposium, however, the bank saw markets reprice toward tighter Fed policy.
Citi’s economist now expects a rate hike, with U.S. interest rates identified as the main driver for gold prices.
China remains a major source of support. The People’s Bank of China bought 650,000 troy ounces in August, its biggest monthly purchase since late 2023 and the 22nd straight month of buying.
Gold ETF demand is also holding up. Around $7 billion flowed into GLD over the past two months, the strongest inflow since November 2025.
Why It Matters
Higher rates can strengthen the dollar and lift real yields, making gold less attractive. Yet persistent central-bank buying and investor concerns over currencies continue to provide a floor.
Jeff Currie sees Treasury buybacks as the “ultimate buy signal” for gold over the long term.
Traders will focus on Fed signals, U.S. inflation, and Treasury policy. A further hawkish shift could pressure gold, while renewed rate-cut expectations may revive the bullish trend.
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Sources: Investing.com & Gold-Eagle
Time: 5:00 PM EEST
