Gold Prices Soar 13% in August Amid ETF Buying and Weaker Dollar

Gold prices surged 13% in August to $4,563 per ounce, marking its third-highest monthly return in 25 years, according to the World Gold Council. The rally was driven by strong ETF buying and a weaker US dollar. The WGC's Gold Return Attribution Model (GRAM) attributed momentum factors to widespread ETF buying.

ETF inflows were broad-based across Europe ($7.9 billion), North America ($7.8 billion), Asia ($2 billion), and Comex net managed money positioning increased by $13 billion, according to the WGC. The report stated that a rise in implied gold volatility, representing strong call buying, also helped drive prices higher.

Attention is now turning to the Federal Reserve's September rate decision, with expectations shifting amid changing economic and geopolitical signals. Solid economic data and billowing inflation fears had suggested a hike in June, but softer data allayed those fears. However, expectations have see-sawed on a pervasive continuation of the US-Iran conflict.

Comex gold surged marginally on September 9, up 0.28% just above $4,451 per ounce. Domestic MCX gold futures for the October contract traded 0.7% to Rs 1,53,644 per 10 grams. Meanwhile, spot gold was hovering around Rs 1,52,764 per 10 grams.