Gold Holds Near US$4,400 — Positioning Data Says the Rally Isn't Crowded ... Yet

Jimmy Wong

Gold pushed to a fresh 10-week high near US$4,400 this week, then gave some of it back. The rally ran through Wednesday on cooling US inflation data, which pushed the market's expectation of a September Fed hike down sharply — CME's FedWatch tool now shows around a 69% chance the Fed holds steady next month, up from just 42% a month ago. Because gold pays no interest, a lower chance of a hike means less reason to hold something else instead of it — that's about as direct a line as you'll find between Fed expectations and the gold price. Friday clawed some of that back, with gold slipping under US$4,350 as capital rotated briefly out of mining stocks and into beaten-down tech names. Even so, gold is still up more than 10% for August alone.

The more interesting story is sitting underneath those price moves: how hedge funds are actually positioned, and why it shows gold has more room to run higher. Every Friday, the CFTC publishes a report on exactly how large speculators are positioned in gold futures — one of the better gauges of whether a rally is running on genuine buying or just excitable momentum money. This week's report showed hedge funds added only around 15,000 net-long contracts over the week — a modest bump given how strong the rally has been, nowhere near an extreme reading. Zoom out further and it gets more telling: across the whole of 2026, despite gold swinging from January's record high through a brutal correction and back up near records again, hedge fund positioning has stayed remarkably flat.

That matters, and here's why. When speculative money piles heavily into a rally, it's usually a warning sign, not a good one — it means most of the people who wanted to buy already have, so there's a limited pool of fresh buyers left, and any bad headline can trigger a rush for the exits all at once. What we're seeing instead is close to the opposite: the trade isn't crowded. That leaves genuine room for more buying if the rally continues, without first needing to clear out an overextended position. It also says something about who's actually doing the buying this cycle — it looks more like central banks, ETFs and institutional money than fast-moving hedge funds chasing the price, which tends to be steadier, less reversible demand.

A quieter thread worth having on the radar: the Middle East standoff has changed shape, and it's starting to show up in Australian miners' costs. Washington has shifted from active strikes to a slower squeeze — a naval blockade and stepped-up sanctions on Iran, which the Pentagon estimates has already cost Iran roughly US$4.8 billion in lost oil revenue. Crude itself has stayed in a fairly boring range near US$88, but the real damage is showing up in diesel specifically: Gulf refineries that turn crude into diesel for Asia are damaged or unable to ship, and the International Energy Agency expects global inventories to draw down by around 1.8 million barrels a day this quarter. Australia imports roughly 85% of its diesel by ship, mostly from Asian refiners running Gulf crude — so when the Gulf can't export, local haul-truck fleets feel it directly. It's already visible this reporting season: several Australian miners have named diesel and freight specifically as reasons their costs crept higher. It's a slower, structural squeeze on margins rather than a single news event — distinct from the sharper Hormuz headline swings, and worth tracking on its own.

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