Gold Soars on Rate-Hike Expectation Compression and Central Bank Buying

Gold prices have surged in August, hitting an intraday high of $4,509 on August 13 before settling back to around $4,380. This marks a significant monthly gain for gold, with prices up roughly 10% from their early-August low near $4,000.

The recent rally can be attributed to three key data prints released in one week: the July jobs report, July CPI, and July PPI. The jobs report showed a decline of 23,000 nonfarm payroll jobs in July, exceeding expectations of +83,000. This led to a decrease in rate-hike expectations from roughly 50% to approximately 31%.

Central banks have also continued to purchase gold at a record pace, with a net 288.9 tonnes acquired in Q2 2026, a 62% increase year-over-year. This structural buying is providing the floor for this rally and has been driven by central bank reserve managers seeking to accumulate gold at lower prices.

The next decisive event for gold will be the August CPI releases on September 10, followed by the Federal Open Market Committee meeting on September 15-16. These events will determine whether the current rally extends or reverses.