There are no "bears" left on Wall Street: gold has hit a high not seen in more than a quarter

The spot price of gold rose by more than 1% during trading on August 24, reaching $4,659.95 per troy ounce. This is the highest price since mid-May. The rally has now continued for the fourth consecutive week. In August, the combined market value of the two main precious metals—gold and silver—increased by nearly $5 trillion, according to calculations by Bull Theory cited by Yahoo Finance.

After gold broke through the $4,600 mark late last week, there were no “bears” left among Wall Street traders, and retail investor sentiment has shifted into “bullish” territory, according to gold dealer Kitco. This optimism was backed by actual investments: gold exchange-traded funds (ETFs) tracked by Bloomberg increased their holdings by more than 28 metric tons last week—the largest inflow since January, Bloomberg reported.

The inflow of funds shows that more and more investors are joining the rally, noted Christopher Wong, an investment strategist at Oversea-Chinese Banking Corp. However, a further rise is not guaranteed. “The rally has room to continue, although after the recent sharp market move, some consolidation wouldn’t hurt,” Wong said (as quoted by Bloomberg). The strategist identified a new round of rising real bond yields and a strengthening dollar as the main risks in the near term.

Last week, gold fell to $4,324 before the price jumped above $4,500 following the U.S. Treasury’s decision to double its purchases of 10- to 30-year Treasuries—to at least $4 billion per transaction. Immediately afterward, long-term bond yields fell briefly, the dollar weakened, and demand for gold as a safe-haven asset strengthened, according to Kitco.

The Fed’s minutes from its July meeting also supported the rally: they showed that the central bank is concerned about inflation but is unlikely to raise interest rates again in the near future. By last Friday, bond yields had risen again, but that didn’t stop gold: the precious metal ended the week above $4,600 per ounce.

Bloomberg attributes the gold rally to a renewed bet on the dollar’s depreciation. The U.S. Treasury’s attempt to keep borrowing costs in check through direct intervention in the bond market has heightened doubts about the reliability of the U.S. currency and increased the appeal of alternative assets. The same investment thesis helped gold rise 65% in 2025. The current weakness of the dollar is providing additional support for the metal: gold and other exchange-traded commodities, whose prices are denominated in U.S. dollars, are becoming more affordable for buyers outside the United States.

Due to fears of currency devaluation, investors may begin actively shifting their investments into precious metals, according to Justin Lin, an analyst at Global X ETFs. Billionaire and Bridgewater Associates founder Ray Dalio has called for reducing bond holdings and allocating up to 15% of assets to gold to protect against the risk of a debt crisis in the U.S.

According to Reuters, the speech by U.S. Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium is expected to serve as a guide for the gold market this week. “Measured or cautious rhetoric that leaves room for maneuver will likely allow gold to continue rising,” the agency quotes KCM Trade analyst Tim Waterer as saying.

Slowing inflation, weak consumer data, or a downward revision to employment figures could reinforce expectations that the Fed will leave rates unchanged and provide support for gold. Strong economic growth data, sustained inflationary pressure, or hawkish rhetoric from Warsh, on the other hand, could reignite expectations of a rate hike and put pressure on gold and silver, according to Kitco.

This article was AI-translated and verified by a human editor