Gold prices extend their rally, surpassing US$4,600 for the first time since May, amid weakening US dollar, easing US economic data, and rising demand for safe havens driven by geopolitical and fiscal concerns.
Gold extended its rally on Friday, moving above US$4,600 an ounce for the first time since mid-May as a softer US dollar and fresh investor buying lifted demand for the metal. The move left spot gold on course for a third straight weekly gain and underscored how quickly sentiment has shifted after a period of weakness earlier this year.
Reuters reported that gold has climbed roughly 13% over the past month as investors reassessed the outlook for US rates and sought protection against policy and geopolitical risk. Softer US economic data has reduced confidence in further interest-rate increases, while hopes of a ceasefire in the Middle East have also added to demand for havens. Goldman Sachs said in a note that call-option buying had risen sharply, helping magnify swings in the price as traders rushed to position for macroeconomic hedges.
The latest lift also follows the US Treasury’s decision to step up buybacks of longer-dated government debt, a move that helped push both the dollar and bond yields lower. UBS chief strategist Bhanu Baweja told Bloomberg the policy was an important signal for gold, arguing that bullion could benefit if Washington succeeds in containing borrowing costs. Even so, the metal’s rise has continued despite some of the earlier drop in 30-year Treasury yields fading, suggesting investors are also responding to worries about the dollar and broader fiscal credibility, Saxo Markets strategist Charu Chanana told Bloomberg.
The rebound marks a sharp reversal from the start of the year, when gold had been drifting away from its highs as expectations of tighter monetary policy and inflation concerns weighed on the metal. Those pressures have eased, and the so-called debasement trade has re-emerged, with investors again favouring hard assets as a hedge against heavy public borrowing, weaker currencies and policy intervention. MKS PAMP strategist Nicky Shiels said this week that the theme was back “as both a trade and a theme”.
Investor flows are beginning to reflect that shift. Bloomberg reported that gold-backed exchange-traded funds added 18 tonnes on Thursday, their biggest daily increase since September 2025, putting holdings on track for a fifth straight week of inflows. Other precious and industrial metals have also advanced, with silver, copper and zinc all posting strong gains, reinforcing the view among some market participants that a broader commodity cycle may be building.
Former Goldman Sachs commodities chief Jeff Currie says the rally is part of a larger turning point. In a post on X, he wrote: “Wake up, folks. Commodities are telling you something, and yesterday the Treasury confirmed it,” framing the move as a clash between physical scarcity and financial repression. Gold miners have benefited as well, with VanEck’s gold and junior miner funds both outpacing the metal in August, while exploration companies from British Columbia to Brazil are drawing renewed attention as the sector’s mood improves.
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