Gold: Hedge Against Geopolitical Risk — August 17, 2026 [RISK ON]

REGIME: The current Alphameter reading of 0/100 indicates a RISK-ON episode, which is NEUTRAL for gold, as the backtest data shows that gold performs positively in both risk-on and risk-off regimes, with a modestly better performance in risk-off episodes, earning +11.3%/yr in risk-on and +13.0%/yr in risk-off. SENTIMENT DRIVER: The absence of a specific headline catalyst today means that the key indicator of real yields is the primary driver of sentiment, with positive real yields acting as a structural headwind for gold, as evidenced by the current 10Y Real Yield of 2.39%. ANALYSIS: Through the lens of a hedge against geopolitical risk, gold's recent price action, with a 7d change of +2.0% and a 30d change of +8.3%, suggests that investors are seeking safe-haven assets despite the current RISK-ON episode, which may be driven by central bank demand and concerns about future geopolitical events, and as the backtest data shows, gold has historically performed well in both risk-on and risk-off regimes, earning +11.3%/yr and +13.0%/yr respectively. RISK FACTORS: Two specific catalysts that could flip the signal BEARISH for gold are a decline in central bank demand, potentially triggered by a shift in monetary policy, and a significant increase in real yields, such as a rise above 3.0%, which would exacerbate the existing structural headwind for gold. WATCH: The upcoming event to watch is the Federal Open Market Committee (FOMC) meeting on March 15, 2024, which may provide insight into the future direction of monetary policy and its potential impact on gold prices.