Gold Surges as US Intervention Shifts Market Expectations

The gold price has risen significantly in recent weeks, reaching US$4,662/oz after a 6.4% increase. This dramatic rebound started with a 7.2% jump two weeks ago and appears to be driven by US intervention in bond markets.

This is the third major sign of widening global economic issues over the past month, following significant US purchases of the Yen in late July 2026 and weak US employment data in early August 2026.

The market consensus just a month ago was that gold would be under pressure from high inflation caused by rising oil prices and strong US employment, leading to rate hikes and a boost to real yields. However, this has shifted substantially due to the recent weakness in US employment data and the country's support for the Yen and bond markets.

The US intervention in the bond market involved purchasing longer-duration bonds, which increased demand and drove up their price, thereby reducing yields. This was intended to lower surging long-term borrowing costs for the country.