Analysis points out that on August 5, spot gold surged by $188 (4.48%) in a single day to $4246.79/ounce, primarily triggered by short covering from systematic trend-following funds (CTA), with macro signals serving only as a catalyst.
Wall Street Insights analysis suggests that this surge was the largest single-day gain since February and the highest closing price since June 18. On a macro level, the ADP July new jobs report was much lower than expected that day, Donald Trump stated that negotiations with Iran were progressing smoothly, WTI crude oil plummeted by 5.5%, and the DXY fell below 100. These factors collectively pushed down the probability of a September rate hike and U.S. Treasury yields, providing an initial catalyst for gold's rise. However, the analysis believes that the core driver of the extraordinary 4.48% surge was the concentrated triggering of programmatic short-covering orders by CTA funds after gold prices broke through the key technical level of $4200, leading to a large-scale short squeeze, rather than active buying pushing up prices.
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Disclaimer: This content reflects the author's personal views only and does not constitute investment advice.
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