Key Takeaways:
Goldman's macro-fund clients bought three-to-six-month digital options targeting $4,800 to $5,500, while some large accounts bet silver reaches $90 an ounce within three months.
Gold traded above $4,600 an ounce, up 15 percent since mid-July, after reclaiming its 200-day moving average of $4,513.
Goldman Sachs' trading desk raised its long positioning to about 60 percent, with macro funds buying three-to-six-month digital options and spot targeting $4,800 to $5,500, according to the bank's latest report.
The move accelerated after the US Treasury doubled liquidity-support buybacks for 10-to-30-year securities to at least $4 billion per operation, sending the 30-year yield down near 9 basis points and the dollar lower. Gold is up more than 14 percent in August, on track for its biggest monthly gain since 1999.
Goldman's gold analyst Lina Thomas said the bank's year-end 2026 forecast of $4,900 an ounce carries "significant upside risk," as dealer hedging from call-option flows could push prices higher.
When investors buy call options, market makers selling them must buy gold to hedge as prices rise. If gold approaches concentrated strike prices, that hedging demand can build into a self-reinforcing rally. Goldman noted the last time gold broke above its 200-day moving average, subsequent gains reached 180 percent.
The mechanism cuts both ways. If inflation surprises higher and markets reprice rate hikes, dealers unwinding hedges could trigger outsized downside moves.
Goldman trader Adam Gillard said he remains "very comfortable" holding gold longs, citing a weaker dollar, renewed central-bank buying, and positioning that is not yet crowded. Some large clients have placed digital options betting silver reaches $90 an ounce within three months, a trade that historically draws retail flows when gold prices get high.
Central banks continue buying gold at a steady pace, and Goldman economists expect the Federal Reserve to hold rates through 2026 as inflation cools, supporting renewed ETF demand.
The extra $2 billion per operation is small relative to the roughly $31 trillion Treasury market. Traders are pricing the signal rather than the volume — that Treasury Secretary Scott Bessent's department is willing to lean against disorderly moves in long-term yields. Joseph Purtell, a rates trader at Neuberger Berman, questioned whether the extra amount justified the nine-basis-point move, calling it a "soft line in the sand" for yields.
Prediction markets suggest the bond selloff may not be over. Kalshi traders put 53 percent odds on the 10-year finishing 2026 at 4.75 percent or higher. Peter Schiff argued the Treasury is accepting higher inflation to slow the rise in long-term rates, calling Bitcoin "a sell" even as it rose more than 5 percent near $68,100.
This article is for informational purposes only and does not constitute investment advice.
