CITIC Securities: Around $4,000 Is Likely the Bottom for This Gold Rally
Alina Collins
CITIC Securities says gold has likely reached its correction floor near $4,000 per ounce, with two independent models converging on the same conclusion; this means → if the call is right, the current level marks a mid-bull pullback low, not a trend reversal.
How did they arrive at "$4,000 is the bottom"?
Method one: map the deepest drawdowns of the three major gold bull runs since 1968. Excluding the first (a special case), the prior two both peaked at roughly -29% — applying that to the current cycle puts the floor near $3,840 per ounce.
Method two: a six-factor gold-pricing model (a framework weighing rates, the dollar, geopolitics, and three other variables simultaneously) yields a floor of roughly $3,970 under pessimistic assumptions.
In plain terms = one road looks backward at historical patterns, the other looks forward from current inputs. Both land around $4,000 — the report argues there is very little room left to fall.
Is the bull market really still intact?
CITIC judges gold remains in the bull cycle that began in 2015, supported by three pillars: U.S. fiscal deficits climbing almost irreversibly year after year, persistent de-globalization and geopolitical conflict, and sustained heavy central-bank buying worldwide.
This means → short-term prices can swing wildly on speculative flows, but as long as these three pillars hold, the broader uptrend stays intact.
The report highlights World Gold Council data showing central banks' commitment to gold rising every year — a slow-moving variable, but one with a very clear direction.
Why did gold rally first, then sell off this year?
The report splits this year's price action into four phases: Jan–Feb, geopolitical-conflict expectations drove gold higher; Mar–Apr, the U.S.–Iran–Israel conflict escalation paradoxically triggered a speculative panic exit — gold traded like a risk asset, not a haven.
Apr to mid-Jun, the market desensitized to geopolitics and speculative capital rotated into AI stocks, pushing gold lower; late Jun–Jul, speculative positioning largely cleared out and gold entered a bottoming grind.
In plain terms = the selloff was not about gold's fundamentals deteriorating — it was driven by hot money flooding in, panicking out, then chasing AI — fund flows, not value, dictated the price.
Is gold's "identity" switching back?
CITIC notes that since July, the negative correlation between oil and gold has been decoupling — the link between Strait of Hormuz tensions and gold's direction is reversing.
This means → gold is shifting from "risk-asset mode" back to "safe-haven mode." The same geopolitical stress that previously dragged gold down is now starting to lift it.
The report argues the U.S.–Iran–Israel conflict is unlikely to resolve quickly; once speculative capital has fully exited, geopolitical pessimism should re-convert into price support.
Could the Fed turn out more dovish than the market expects?
Fed chair nominee Kevin Warsh has a mixed track record on policy stance, leaning dovish overall; yet at the July FOMC meeting, three voting members dissented against a rate hike, revealing complex internal divisions.
CITIC's call: caught between competing pressures, the Fed is most likely to stand pat before November's midterm elections. The market's current pricing of rate hikes may be too pessimistic.
This means → if actual policy ends up looser than priced in, that is an extra tailwind for gold — lower or flat rates reduce the opportunity cost of holding a non-yielding asset.
What are the next key dates to watch?
The report flags two windows: the FOMC meeting before the November midterms and the Jackson Hole symposium — either could signal a restart of the gold bull run.
The updated six-factor model shows that under neutral assumptions, gold could break its all-time high by early next year.
Risk factors include: Fed policy tighter than expected, an escalation in the U.S.–Israel–Iran conflict, stronger-than-expected U.S. growth, and broad financial-market volatility.
Content is for reference only, not financial advice.