Gold and silver prices are ending August with a sharp rally. Gold prices have risen about 15% this month, while silver prices have jumped around 19%. The rally has added huge value to the precious metals market. Together, gold and silver have gained nearly $5 trillion in market value in August, based on an analysis from Bull Theory.
Despite the strong August gains, both metals are still below their record highs from earlier this year. This means the recent rally has not yet pushed gold and silver back to their previous peak levels, according to Yahoo Finance. Several major factors are pushing precious metals higher. These include changes in monetary policy, rising geopolitical tensions in the Middle East and continued concerns about global inflation.
US Treasury bond buybacks
A major trigger for the latest rally came from the US Treasury. The Treasury unexpectedly decided to double its long-term bond buyback programme to $4 billion per session, according to Yahoo Finance.
The Treasury move helped fuel more buying in precious metals. The decision triggered a wave of investors buying back short positions, known as short-covering, along with fresh speculative buying in gold and silver markets.
Gold safe-haven demand
Geopolitical tensions are also supporting gold prices. The ongoing war involving Iran has pushed energy prices higher again, according to Yahoo Finance. Higher geopolitical risks are strengthening gold’s safe-haven appeal. Investors often turn to gold when they are worried about wars, economic uncertainty or financial market instability, and the Iran conflict has added to that demand.
Also read: Why did stock futures slip? Treasury yields, Iran war fears weigh on Wall Street
Silver supply shortage
Silver has another major advantage beyond the broader economic factors helping gold. Silver is facing a physical supply shortage at a time when demand from industries is continuing to increase. Industrial demand for silver is rising because of new technology and infrastructure. AI data centres, modernisation of electrical grids and advanced electronics are all using silver.
This industrial demand is putting pressure on available silver supplies. Physical silver inventories are being used faster than global mines can produce new supplies, according to Yahoo Finance. This supply-demand gap is one reason silver has performed better than gold in August. While both metals are benefiting from the same broader economic and geopolitical factors, silver is also getting support from strong industrial demand and limited physical supply.
Wall Street view on gold
Truist has also become more positive on gold. Truist Chief Investment Officer Keith Lerner recently upgraded his view on gold to neutral, saying the market conditions have improved, according to a note cited by Yahoo Finance. Lerner said investors should keep an open mind and follow the available evidence. He said gold is still about 15% below its recent highs, which makes the current market conditions more balanced.
One reason for the improved outlook is that real yields have stopped rising. Higher real interest rates had been a major problem for gold because they can make interest-paying assets more attractive compared with gold. Real yields have now stabilised. Lerner said the recent increase in US Treasury purchases of longer-term bonds could also help reduce upward pressure on interest rates.
Also read: Which US products could get pricier under Trump’s tariffs? Here’s the list
Gold 200-day moving average
Gold’s technical picture has also improved. Gold has moved back above its 200-day moving average, which is considered an important technical indicator by investors, according to Lerner. Moving back above the 200-day moving average suggests that the earlier downward momentum has weakened. This has given the gold market a more positive technical signal.
Central banks are continuing to support gold demand. Despite earlier concerns that central banks could reduce their purchases, recent data show that they are still adding gold to their reserves. Central bank buying is important because it provides another source of demand for gold. Continued purchases can help support prices even when other parts of the market become weaker.
The US dollar is another factor helping gold. Recent US economic data have shown cooling inflation and weaker payroll numbers, while the Federal Reserve has taken a more dovish approach. These developments have reduced expectations for further interest-rate hikes. They have also pushed the US dollar lower from its recent highs. A weaker dollar has historically been positive for gold. Gold is priced in US dollars, so a softer dollar can make the metal more attractive to buyers using other currencies.
What happens next?
Gold could remain strong through the end of August if these factors continue. The combination of stabilising real yields, central bank demand, a softer dollar, geopolitical risks and continued investor interest is supporting the metal, according to Lerner’s analysis.
However, returning to gold’s earlier record highs may be harder. Gold would need to climb back toward around $5,300 an ounce to reach the highs seen earlier this year, and Yahoo Finance said getting back to that level could prove more difficult.
For silver, the outlook is being driven by both investment demand and industrial demand. The metal is benefiting from the broader precious-metals rally while also facing strong demand from AI infrastructure, electrical grids and advanced electronics.
In simple terms, gold is getting support from uncertainty and financial conditions, while silver has those same factors plus a supply-demand problem. That combination helps explain why gold is up about 15% and silver about 19% in August.
