Gold prices rise due to macroeconomic and geopolitical factors; Wall Street banks predict a bullish outlook.

Huo Xing Finance reports that on August 6, after nearly a month of consolidation, international gold prices ended their sideways movement, with spot gold briefly reclaiming the $4,300 per ounce level and reaching its highest level since early July. This round of gold’s rebound was not driven by a single factor, but rather by a combination of macroeconomic policy expectations, official demand, institutional capital flows, and market sentiment. On the macroeconomic front, U.S. July ADP employment data showed only a 44,000 increase, significantly below market expectations, indicating continued cooling in the U.S. labor market. As a result, market expectations for further Fed tightening were revised downward. Meanwhile, expectations for a September Fed rate hike have clearly softened, leading to concurrent declines in U.S. Treasury yields and the dollar, which has renewed the appeal of gold as a non-yielding asset. The market is now awaiting the non-farm payrolls data to confirm whether the U.S. economy is further slowing. On the geopolitical front, recent signs of de-escalation have emerged in the Strait of Hormuz. Diplomatic negotiations between the U.S., Iran, and Oman have made progress, lowering market expectations for global energy transport risks. This has contributed to a decline in international oil prices and a reduction in energy inflation expectations, further weakening market bets on continued Fed hawkishness and serving as a key catalyst for gold’s recent rally. Official demand remains the most important long-term support for the gold market. The Bank of Korea announced it has resumed gold purchases after a 13-year hiatus, having already begun allocating to gold ETFs and planning to establish a mechanism for purchasing physical gold domestically. Meanwhile, data from the World Gold Council shows that global central banks net purchased 288.9 tons of gold in the second quarter of 2026, a 62% year-over-year increase and a record high for the same period, reflecting ongoing efforts by central banks worldwide to diversify reserve assets and sustained strategic demand for gold. In terms of capital flows, Chinese gold ETFs have recorded net inflows for 14 consecutive trading days—the longest such streak since March this year. Macro funds have steadily increased their gold allocations since June, Asian capital has re-entered the gold market, and premiums for Shanghai Gold Exchange gold over London gold have re-emerged, signaling sustained improvement in Asian physical demand and providing key support for gold’s stabilization and recovery. On the institutional front, multiple Wall Street firms continue to maintain a bullish long-term outlook for gold. Deutsche Bank believes gold remains in its “explosive rally phase” since 2024 and maintains its year-end 2026 price target of $4,600. UBS expects gold to reach $4,600 by year-end and potentially challenge $5,000 in 2027, supported by sustained central bank buying, recovering investment demand, and a Fed policy pivot. Citigroup, State Street Global Advisors, and other institutions also anticipate further upside potential for gold in the medium to long term, underpinned by continued central bank purchases and sustained capital inflows.