Weakening Dollar and Geopolitical Tensions Boost Gold Prices

Gold has regained momentum over the past month, reversing the decline seen in July. International gold prices have surged by more than 16% in August, while MCX Gold Futures have gained nearly 14%. The weakening U.S. Dollar Index, which has dropped to around 98.50 from its previous level of 101.50, is a major catalyst behind this rally.

The dollar's decline provides a boost to gold as it makes the precious metal more attractive to international buyers and investors. Additionally, growing expectations that the Federal Reserve is nearing the end of its interest rate tightening cycle have reduced pressure on bond yields, improving the appeal of non-yielding assets such as gold.

Geopolitical uncertainty has also emerged as a source of support for gold, with ongoing tensions involving the United States and Iran reviving safe-haven demand. Central banks continue to accumulate gold reserves, which is becoming an important structural driver of the market.