George Efstathopoulos has been here before, and it cost him.
The Fidelity International portfolio manager had dumped his gold position earlier in the year, just as the metal entered its sharpest downturn in 40 years. In the past three weeks he has since rebuilt the position, reaching his self-imposed 5% cap on the trade. His reason is simple: he no longer trusts the Federal Reserve.
Efstathopoulos started buying after investors pulled back from long-dated Treasury bonds following the Fed's July meeting. Then the US Treasury stepped in last week with a bold intervention in the bond market, buying long-dated bonds in a move that revived worries about a weaker dollar.
He saw that intervention as an attempt to control yields rather than fix the underlying problem. "To manipulate the yields, rather than dealing with the source of why yields are moving higher," he said.
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That distinction matters. "My translation of that is the lack of Fed credibility and more policy uncertainty," Efstathopoulos added. "Gold now is less focused on yields rising, but why yields are rising."
He paid for the added gold by selling high-yield bonds, including gilts, and pulling from cash. If the dollar keeps losing its safe-haven appeal, he said he would consider raising the 5% ceiling.
Gold has rebounded to a three-month high and moved back above its 200-day moving average, a level traders often read as a bullish signal.
The positioning data backs him up. For the week ended Aug. 18, hedge funds' net-long position in gold reached a 2026 high, based on Commodity Futures Trading Commission figures.
The bigger picture also supports the move. The forces that pushed gold to an all-time high in late January, such as central bank buying, are still in place. China added roughly 20 tons to its gold reserves in July, marking the largest monthly addition since October 2023.
The signal is hard to ignore: a seasoned trader who has been burned by this exact trade has come back and doubled down. The dollar's role as a safe haven is not guaranteed, and gold is the classic hedge when that status begins to crack.
For everyday investors, the takeaway is not about chasing gold at its highs. It is about understanding that the rules may be shifting, and that the assets in play may look different from a year ago. If the Fed keeps losing credibility and the Treasury keeps intervening, protecting a portfolio may require a different kind of anchor. As of Aug. 24, 2026, that is the bet Efstathopoulos is making.
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