Gold prices averaged slightly lower in August relative to July amid softer investor demand. Prices averaged USD 1,919 per troy ounce in August, down 1.6% from July’s price but 8.8% higher year on year. Meanwhile, on 31 August, gold closed the day at USD 1,942 per troy ounce, 1.3% lower month on month.
Average gold prices saw a small decrease in August relative to July, influenced by investor expectations of higher interest rates for longer. Given the robustness of recent U.S. GDP data, some investors shifted away from gold due to the possibility of a delay in the Federal Reserve’s policy pivot. This ‘higher-for-longer’ view was confirmed late in the month by hawkish remarks from the Fed’s governor at the Jackson Hole Symposium. The Fed’s recent hawkish tone has helped push up Treasury yields, further contributing to decreased demand for gold as the opportunity cost of holding the metal increased. A hawkish Fed has also boosted the greenback, making gold purchases less affordable for holders of other currencies and adding to the decline in demand. Additionally, the introduction of a tariff on some gold imports by Turkey at the start of August likely constrained demand. Media reports suggested the country may also introduce a quota on unprocessed gold.
Gold LBMA (prices in US$/toz, aop)
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