Istanbul, August 24 (HNA) – Following gold’s sharp rally last week from its July lows, there is speculation as to whether this recovery will continue. Spot gold prices were trading at $4,672 per ounce at midday on Monday 24 August, up 1.5 per cent from Friday’s close. As of Monday 24 August, gold prices have risen by 5.7 per cent over the past week and by 15 per cent over the past month.
ING Bank, based in the Netherlands, has stated that a sustained recovery in the gold market – which is being supported by renewed investment demand and growing concerns over the US fiscal outlook – will not be easy, due to persistent inflation and the likelihood of further tightening by the US Federal Reserve (Fed).
In an analysis dated 21 August, authored by Ewa Manthey and published on ING Bank’s website, it was noted that gold prices had risen from around $4,000 per ounce in mid-July to approximately $4,600, returning to levels last seen in May, and the following view was expressed:
“This latest move followed the US Treasury Department’s decision to increase purchases of long-term government bonds. The maximum size of buybacks of 10- to 30-year Treasury bonds will rise from $2 billion to at least $4 billion, and Treasury Secretary Scott Bessent signalled that the programme could be expanded further. The impact on the bond market was short-lived, and long-term yields subsequently recouped a large portion of their losses. However, gold continued to strengthen.”
The analysis emphasised the bank’s view that “Gold’s resilience shows that the rally is not merely a reaction to low yields. The prospect of larger Treasury buybacks has refocused attention on government borrowing and fiscal credibility. It has also reignited concerns about currency depreciation and strengthened gold’s appeal as a store of value.”
It was also noted that the softening of US economic data and expectations that the Fed might begin to ease monetary policy in 2027 are providing support for gold.
The analysis noted that, alongside fund purchases, central banks continue to be a significant source of demand, whilst emphasising that inflation remains the main obstacle to gold’s rise.
The analysis stated that the Fed’s annual Jackson Hole symposium, to be held from 27 to 29 August, would be closely monitored, and that any sign that policymakers were becoming more willing to raise interest rates would carry the risk of pushing up yields and the dollar, which would in turn put pressure on gold.