Gold just had its best week in 7 months. Here’s why Mike Khouw is buying more

Gold jumped ~7% last week (best weekly gain since January) as the weaker U.S. dollar and falling Treasury yields reduced the opportunity cost of holding non-yielding bullion. Softer-than-expected employment data (with low layoffs and a seasonal negative skew) eased fears of aggressive Fed rate hikes, supporting safe-haven demand alongside a broader precious-metals rally (silver/platinum/palladium). China’s PBOC expanded gold storage in Hong Kong, adding 20 tons in July 2026, while gold miners’ ETFs (GDX/GDXJ) face resistance at the 150-day moving average as Newmont breaks above it; options traders note a more favorable “volatility smile,” with a GLD November 400/460 call spread costing ~$16.15 for an upside payoff of ~3:1 if GLD rises another ~15% over ~100 days.

Analysis

The move is less about "gold demand" and more about the macro discount rate collapsing. If real yields keep rolling over, bullion can re-rate quickly, but the second-order effect is that miners become the higher-beta expression of the trade: operating leverage expands margins faster than the metal price, yet the same leverage cuts both ways if the rally stalls below key technical resistance.

The fact that one large producer has already cleared trend resistance while the broader ETF basket has not is a useful tell: this is a stock-selection market, not a clean sector breakout. That usually favors low-cost, high-free-cash-flow names over marginal producers, and it also suggests passive flows may lag until price confirms above moving averages. In the background, Asian reserve accumulation and regional bullion plumbing are supportive for long-term liquidity, but that is more likely to tighten the East-West arbitrage and improve trading volumes than to create an immediate shortage premium.

The contrarian read is that the labor signal may be getting overstated, so this can reverse fast if the next inflation print or Fed communication re-prices cuts out of the curve. Gold is still a non-yielding asset, so any rebound in the dollar or Treasury yields is the cleanest falsifier over the next 2-6 weeks. If that happens, miners should underperform bullion first, with juniors and higher-cost names giving up the most.

Key Decisions for Investors

• Tactical long GLD via November call spread structure rather than outright futures: use a defined-risk upside expression while real yields are still falling; attractive if gold can sustain the last week's breakout for 4-10 weeks. Falsifier: DXY and 10Y real yields turn higher for two consecutive weeks.
• Long NEM vs short GDX as a relative-value pair for the next 1-3 months. NEM's leadership suggests the market is rewarding balance-sheet quality and cash generation ahead of broad sector confirmation; the short leg hedges gold beta if the move fades at resistance.
• Do not chase GDX/GDXJ here; wait for a weekly close above the 150-day moving average before adding beta exposure. If the ETFs fail at that level again, expect a fast giveback in the more levered juniors.
• Watch SLV as the secondary beneficiary, but only add if gold holds gains and copper stops leading. If silver lags while gold rises, that usually signals a defensive macro bid rather than a broad commodities upcycle.
• Set a macro alert rather than a trade: if next CPI or Fed rhetoric pushes front-end yields back up, take profits on gold longs quickly. The trade works best on a 2-6 week window; beyond that, carry and policy repricing matter more than the initial squeeze.