- BIST10011,430-2.49%
- USD49.45+0.05%
- EUR55.62+0.37%
- GOLD4,165.50-0.37%
- INTEREST37.00%-1.00
- BITCOIN81,754-0.31%
- October 19, 202618°
- BIST10011,430-2.49%
- USD49.45+0.05%
- EUR55.62+0.37%
- GOLD4,165.50-0.37%
- INTEREST37.00%-1.00
- BITCOIN81,754-0.31%
- October 19, 202618°
Gold rose 10% in August as the U.S. Treasury increased bond purchases
Gold rose 10% in August to $4,449 an ounce, posting its fastest monthly gain in seven months. Silver also rose 15.4% over the same period to reach $66.5 an ounce.
The U.S. Treasury’s decision to increase the size of its long-term bond buyback operations and slowing inflation in the United States were among the leading factors behind the rise in precious metals in August. During the month, gold rose 10% to $4,449 an ounce, recording its strongest monthly gain in seven months.
Gold’s movement came at a time when rising oil prices were intensifying concerns about global inflation and expectations were growing that central banks would pursue tighter monetary policies. Rising demand for the dollar, viewed as a safe haven, created selling pressure on precious metals.
Gold fluctuated in the first months of the year
Gold rose 12.4% in January and 8.5% in February. After beginning to decline following the outbreak of war in the Middle East, gold fell 11.3% in March, 1% in April, 1.8% in May and 11.7% in June.
Gold rose 0.9% in July. Its performance in August was also supported by employment data that weakened expectations of a Federal Reserve rate hike. Relatively lower geopolitical risks also played a role in price movements during the month.
Silver rose to $66.5 an ounce
Silver also recorded a strong rise in August. Its price rose 15.4% to $66.5 an ounce, marking the precious metal’s fastest monthly gain in seven months.
Central bank purchases supported prices
Zafer Ergezen, a futures and commodities markets expert, described the rise in gold as a rebound following the U.S. Treasury’s announcement that it would increase its purchases of long-term bonds. Ergezen said central bank purchases of gold also supported prices.
Ergezen said the high-volume purchases resembled a transaction by a major institutional investor or central bank, adding that there were reports that the People’s Bank of China had purchased 19 tons of gold last month. Ergezen said the central banks’ purchases would appear in the September reports.
Ergezen also said there had been no significant pullbacks in the dollar index, bond yields or oil prices last month. He said the rise in gold therefore also represented a rebound driven by buying.
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