Gold’s surge in August marks fastest monthly gain in over half-year

⁠US Treasury’s long-term bond buyback operation expansion, easing geopolitical risks, and slowing US inflation support gold’s 10% rise in August

Gold rose 10% last month, its fastest monthly gain in seven months, amid the US Treasury’s expanded long-term bond buyback operation, weakening expectations that the Fed would hike rates and a relative easing of geopolitical risks. During this period, demand for the US dollar increased as its safe-haven feature came to the fore amid uncertainties, leading to selling pressure in commodities, especially precious metals. Gold gained 12.4% in January and 8.5% in February but began to decline with the outbreak of the US-Israel-Iran war at the end of February. Gold fell 11.3% in March, 1% in April, 1.8% in May and 11.7% in June before gaining 0.9% in July. The US Treasury expanded its long-term bond buybacks, US inflation slowed, employment in the country weakened Fed rate hike expectations and geopolitical risks relatively eased in August, driving gold up 10% at the end of the month to $4,449 per ounce. Silver saw a similar trend, as the precious metal rose 15.4% in August to $66.5 per ounce due to easing rate hike expectations, also marking its fastest rise in seven months. Zafer Ergezen, a futures and commodity markets expert, told Anadolu that the US Treasury’s announcement drove up gold prices, as did central bank gold purchases. Ergezen stated that there have been very large-scale gold purchases resembling those of a major institutional investor or a central bank. He mentioned that the People’s Bank of China (PBOC) purchased 19 metric tons of gold last month and that these central bank purchases could continue in September. He added that the US dollar, bond yields or oil prices did not significantly decline last month, noting that the rise in gold prices last month could have been a result of reactive buying.