The altii-Gold-Report 2026-04-03

Key Data Snapshot

Macro Backdrop

Gold faces a bifurcated macro environment. Geopolitical risks remain elevated with the Iran war entering its fifth week, yet the metal is currently under pressure from a rebounding US dollar and rising bond yields [T3][T6]. The conflict has disrupted the Strait of Hormuz, creating supply chain uncertainty, but the “safe haven” status has temporarily shifted to the dollar as investors liquidate positions to cover losses elsewhere [T5][T6].

From a monetary policy perspective, markets are pricing in a shift toward easing. Economists expect the Federal Reserve to deliver 50 basis points of cuts by the end of 2026, which would reduce the opportunity cost of holding non-yielding gold [T3]. However, the US dollar remains strong due to the nation being a net energy exporter, which has improved its terms of trade and forced short-sellers to cover positions [T8].

Investment Thesis

The core investment thesis for gold remains anchored on structural de-dollarization and fiscal fragility. International central banks initiated the bull market by diversifying reserves away from the US dollar basket, a trend that persists despite short-term noise [T3][T5].

The thesis posits that gold serves as a critical hedge against rising public fiscal deficits, currency debasement, and structural inflation risks. While hedge funds drove the initial rally through leveraged derivatives, the long-term driver is the accumulation by sovereign wealth managers seeking a risk-free asset during periods of monetary loosening [T5][T8]. The market is currently undergoing a normalization phase where speculative excesses are unwound, but the underlying demand from central banks remains intact.

Bullish Drivers

• Central Bank Accumulation: Central banks remained net buyers in February despite rising geopolitical uncertainty, providing a floor for the market [T7].
• New Liquidity Hubs: Singapore is actively positioning itself as a new gold hub, planning to attract central banks and build clearing systems to rival London [T1][T2][T4]. Simultaneously, China is backing the Shanghai Gold Exchange to court friendly nations, expanding the global physical demand base [T1].
• Fed Pivot Expectations: The market anticipates 50 basis points of Fed rate cuts by year-end. As yields normalize, gold becomes more attractive relative to bonds [T3].
• Institutional Rotation: There is a discernible shift from highly leveraged crypto derivatives to physical gold. Institutional money is flowing into bullion as a safe haven amidst fiscal concerns [T8].
• Valuation Support: Netwealth forecasts gold reaching $5,400 per ounce by end-2026, assuming central bank diversification continues and speculative positioning normalizes [T3].

Relative Positioning vs Bitcoin and Ethereum

Gold is currently outperforming risk-on assets as institutional capital rotates out of high-leverage speculative vehicles. Hedge funds, which drove much of the crypto rally through derivatives, are now unwinding these bets [T5][T8].

This rotation highlights a divergence in sentiment. Gold is viewed as the ultimate risk-free asset during periods of currency debasement and fiscal stress, whereas Bitcoin and Ethereum are still perceived as high-beta assets tied to market liquidity and speculative appetite. The flight to safety into physical gold suggests that while crypto may recover, gold will likely serve as the primary beneficiary of any renewed systemic stress.

Scenario Framework

• Bull Case: The Fed delivers the expected 50bp cuts, the Middle East conflict de-escalates, and central banks accelerate purchases. Singapore and Shanghai hubs become fully operational, supporting liquidity. Gold targets $5,400/oz [T3].
• Base Case: Fed cuts proceed as expected, central banks remain net buyers, and geopolitical risks remain elevated but contained. The market consolidates around current levels, with volatility gradually returning to historical averages.
• Bear Case: The Iran war escalates, disrupting oil supply and triggering a spike in US yields. The dollar strengthens further, forcing hedge funds to continue deleveraging. Turkey sells gold to support its currency, exacerbating the selloff.

Valuation Discussion

The current price of 4,043.17 EUR represents a 13.8% drawdown from the January 2026 ATH of 4,688.32 EUR. Despite this correction, the 200-day performance remains positive at +29.81%, indicating the long-term uptrend is intact [T3][T5].

Volatility is currently running at double its historical average, driven by increased participation from financial investors and the unwinding of leveraged positions [T3]. This elevated volatility suggests the market is pricing in significant uncertainty. However, with inflation risks, fiscal pressures, and bond credibility still acting as structural tailwinds, the current drawdown presents a buying opportunity for long-term holders [T5][T6].

Risks

• Yield and Dollar Strength: A surge in US bond yields or a persistent stronger dollar acts as a direct headwind for gold, as it reduces the asset’s relative value [T3][T8].
• Geopolitical Escalation: While gold is a hedge, a severe escalation in the Middle East could trigger a flight to the US dollar rather than gold, as seen in previous conflicts [T3][T6].
• Turkey’s Position: Turkey has sold gold to support its currency, and if broader emerging markets follow suit to defend their own currencies, it could create selling pressure [T5][T6].
• Hedge Fund Deleveraging: The unwinding of leveraged bets through derivatives remains a primary source of volatility and downward pressure on prices [T5][T8].

Appendix

Sources

• Singapore looks to become hub for hosting central bank gold – Bitget [T1]
• Singapore looks to become hub for hosting central bank gold – Mining.com [T2]
• Gold on track for worst month since 2008 as Iran war enters its fifth week – CNBC [T3]
• Singapore weighs adding gold storage for global central banks – Mining.com [T4]
• Dip-buyers arrive to pull gold back from brink of a bear market – Bitget [T5]
• Dip-buyers arrive to pull gold back from brink of a bear market – Mining.com [T6]
• Central banks remain net gold buyers in February despite rising geopolitical uncertainty – KITCO [T7]
• Jupiter’s Naylor-Leyland: Prepare for another surge in gold and silver prices – Fund Selector Asia [T8]

This report is AI-generated for informational purposes only and does not constitute investment advice. Readers should conduct their own due diligence before making investment decisions.

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