Gold Prices Surge 15% as Central Banks and ETFs Fuel Rally

Gold prices have surged 15% in just one month, marking its strongest rally since April. The precious metal had plummeted to nearly $4,600 an ounce by August after reaching a record high of $5,500 in January.

The recovery is attributed to several factors, including renewed demand for gold exchange-traded funds (ETFs). According to the World Gold Council, about 23 tonnes were added to global gold ETF holdings in July, with around 45 tonnes added month-to-date in August.

Central banks have also continued to purchase gold, with a 62% increase from last year's second quarter. South Korea's central bank has even returned to the bullion market after a 13-year absence.

The US Treasury plans to double buybacks of longer-dated government securities, which could help control long-term bond yields and put pressure on the dollar.