Gold Prices Soar 8% in August Amid Weakening Dollar and Low Interest Rate Hike Odds

Gold prices have rebounded sharply in August, rising to around $4,400 an ounce after falling below $4,000 in mid-July. This marks a gain of 8% in just two weeks.

The factors driving this increase are largely macroeconomic, including inflation, currency movements, and monetary policy. With the Federal Reserve's interest rate hike less likely due to a weak July jobs report, investors are turning to gold as a safe-haven asset.

A weakening dollar also contributes to the rise in gold prices. The trend of central banks diversifying their reserves away from the US dollar has been ongoing since Russia's invasion of Ukraine in 2022 and the subsequent freezing of Russian foreign exchange reserves.