Gold Prices Near Three-Month High Amid US Fiscal Concerns

Gold prices have reached near three-month highs after rallying over 5% in the previous week, driven by growing concerns about US fiscal sustainability, Treasury market intervention, and a weaker dollar.

The Indian Bullion and Jewellers Association (IBJA) reported only marginal improvement in old gold sales in August, despite the sharp price increase. This could indicate that consumers are not rushing to cash in their existing gold holdings at current elevated prices.

Industry experts attribute the divergence between rising prices and relatively subdued old gold sales volumes to consumer expectations of further price increases or a structural preference among Indian households to hold gold as a long-term store of value rather than actively trading it based on short-term price movements.