Gold Prices Surge 14% in August as US Fiscal Concerns Rise

The gold price is showing a positive bias and has rebounded sharply in August, recovering earlier losses and gaining 14% month-to-date. The year-to-date gain stands at around 7%. However, gold still remains about 12% below pre-war levels.

Last week, gold gained around 7% and briefly moved further to $4,700/oz this week, supported by lower US Treasury yields, a weaker dollar, safe-haven demand, and strong investment flows. Prices did witness profit booking at higher levels but the set up remains positive.

One of the key drivers was the US Treasury's decision to increase long-dated bond buybacks, which helped push long-term yields lower. However, this also brought US fiscal concerns back into focus, with the country's debt above $40 trillion and a high fiscal deficit, adding to gold's appeal as a safe-haven asset.

The global investment demand is showing strength, with Global gold ETFs seeing around 46.7 tonnes or $6.4 billion of inflows last week, the strongest weekly inflow since October 2025 and the fifth consecutive week of net buying.