Gold price rises again as weaker dollar, Fed expectations and geopolitical risks drive renew demand

Gold price rises again as weaker dollar, Fed expectations and geopolitical risks drive renewed demand

Gold has resumed its upward move after a period of consolidation, with spot prices trading around $4,400 an ounce as investors return to the precious metal amid a combination of weaker US monetary-policy expectations, renewed geopolitical uncertainty and improving investment demand.

Bullion has gained around 9% so far in August, following a more than 7% weekly advance last week – its strongest weekly performance since January. The latest rally has taken gold back above the $4,400 level after trading within a $3,942-to-$4,202 range between July and the first week of August.

Gold weekly candlestick  chart

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Weaker US rate expectations support gold

One of the most important drivers behind the latest move has been a shift in expectations for US monetary policy.

Gold does not pay interest, meaning its relative attractiveness tends to increase when investors expect interest rates and bond yields to fall. Recent US economic data have encouraged markets to reassess the outlook for the Federal Reserve, particularly after a weaker-than-expected jobs report reduced expectations of further monetary tightening.

That shift has also weighed on the US dollar. Because gold is priced in dollars, a weaker greenback makes bullion cheaper for overseas buyers and can provide an additional source of demand.

Markets are now looking towards US CPI data for further clues about the Fed's next move. The inflation figures are particularly important because stronger-than-expected price pressures could push Treasury yields and the dollar higher, potentially limiting gold's gains. Conversely, evidence that inflation remains contained could reinforce expectations of easier monetary policy and provide further support for bullion.

Geopolitical uncertainty adds to safe-haven demand

The other major factor supporting gold is persistent geopolitical risk.

The conflict involving Iran and the continuing uncertainty surrounding the Strait of Hormuz are keeping investors alert to the possibility of further disruption to energy markets. Recent attacks and renewed tensions have pushed oil prices higher, with Brent crude trading around $91.50 a barrel and US crude near $83.

Higher oil prices create a complicated backdrop for gold. On the one hand, they can increase inflationary pressure and potentially delay interest-rate cuts, which would normally be negative for bullion. On the other, geopolitical escalation tends to increase demand for traditional safe-haven assets.

For now, the safe-haven effect appears to be winning out.

Gold's appeal is particularly strong when investors are concerned about the outlook for global growth, currencies, inflation or financial markets. The latest rise therefore reflects not simply expectations for lower interest rates, but also a broader desire for portfolio protection.

Traders seeking exposure to related commodity markets during periods of geopolitical uncertainty can also access oil trading and silver trading alongside gold through our platform.

ETF demand is returning

Another important development is the return of investment demand through gold exchange-traded funds.

After a period in which gold struggled to maintain its earlier momentum, ETF flows have begun to improve, providing an additional source of buying pressure. Renewed ETF demand is significant because it suggests that the latest rally is not being driven solely by short-term futures positioning or physical-market demand.

Central banks and Chinese buyers also remain important parts of the longer-term gold story. Central-bank demand has been a major structural support for the market in recent years, although estimates for purchases in the first quarter of 2026 were subsequently revised sharply lower, highlighting the difficulty of assessing official-sector demand in real time.

Nevertheless, continued interest from central banks reflects a broader diversification trend away from traditional reserve assets and towards gold.

For investors interested in gaining exposure to gold through funds rather than direct trading, our guide to ETF investing explains how ETFs work and how to access them through our platform.

Gold technical picture improves

From a technical perspective, the latest rally is significant because gold has broken out of the prolonged consolidation range that dominated trading through July and early August.

Gold daily candlestick  chart

The fact that the spot gold price on Monday 10 August closed above its 17 June peak at $4,382.61 - and seems to be on track to do so again on Wednesday 12 August - bodes well for the bulls as it points towards a medium-term bottom having been formed and to an end of the June-to-August sideways trading range.

Immediate technical upside targets are the January-to-August resistance line at $4,480.30 and the 200-day simple moving average (SMA) at $4,499.30. If overcome, the 38.2% Fibonacci retracement of the 2026 descent at $4,577.13 may be reached too. Other potential upside targets are the 50% retracement and the May peak at $4,772.71-to-$4,773.57.

The speed of the recent move does, however, increase the risk of profit-taking. Gold has risen sharply in a relatively short period, and traders may be reluctant to chase the market at increasingly elevated levels.

Potential slips may find support between the 23.6% Fibonacci retracement at $4,335.14 and the late December 2025 low at $4,274.02.

What happens next?

The immediate outlook for gold is likely to depend heavily on the interaction between US inflation, Treasury yields, the dollar and geopolitical developments.

A softer US CPI reading would probably strengthen expectations for easier Fed policy, potentially pushing yields and the dollar lower and giving gold another leg higher. Continued geopolitical tensions would add another layer of safe-haven demand.

The main risk to the rally would be a combination of stronger-than-expected US inflation, higher Treasury yields and a stronger dollar. A sustained easing of tensions in the Middle East could also reduce some of gold's safe-haven premium.

For now, however, the balance of forces remains supportive. Gold's August rebound has been driven by a combination of renewed ETF demand, a weaker dollar, reduced expectations of further US monetary tightening and continued geopolitical uncertainty. With prices back around $4,400 an ounce, the key question is whether the latest rally represents merely a sharp recovery from the summer correction or the beginning of another sustained move towards the year's record highs.

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1. Do your research on gold, the key macro drivers and the technical levels that matter most in the current market
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3. Open a trading account with us
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