Global gold prices experienced a sharp rally on August 5, with spot gold surging over 3% to breach the $4,200 mark as of press time.

By the close of trading on August 5, a number of domestic gold stocks posted significant gains. Sichuan Gold hit the daily limit up, while Zhongjin Gold and Chifeng Gold rose by more than 8%. Hunan Gold, Shandong Gold, Western Gold, and Zijin Mining all advanced by over 6%.

On August 5, a research report from CITIC Securities stated that while gold prices have surged and then rapidly declined this year, the metal remains in a major bull market. The reasons cited include the accelerating expansion of the U.S. fiscal deficit, the difficulty in bridging geopolitical rifts amid deglobalization, and the ongoing support from central bank gold purchases worldwide. Therefore, the current price decline is viewed as a temporary adjustment within the bull market.

The report further noted that the current retracement has approached historical extremes, with the $4,000 per ounce level likely representing the bottom area for this cycle. Looking ahead, it is anticipated that the situation in the Strait of Hormuz will shift from suppressing to boosting gold prices, while the Federal Reserve's monetary policy may prove more optimistic than market expectations. Coupled with a surge in U.S. military spending pushing up the deficit, gold prices are expected to return to an upward trajectory within the year.