Gold in August 2026: is the precious metals market emerging from the shadows?

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• Gold recorded a significant increase in August, surpassing key technical levels.
• The Fed's decision to halt rate hikes weakened the dollar, supporting precious metals.
• Despite signs of recovery, the market remains in a state of a "Wall of Worry," with limited investor activity.

Gold - a breath of optimism in the shadow of uncertainty

August 2026 proved to be a month of growth for gold, with its price reaching $4,268 per ounce on August 6, marking a 2.5% month-on-month increase and an impressive 26.7% year-on-year rise. The metal broke out of its previous trading range of $3,950–$4,200/oz, which is a positive technical signal. Nevertheless, the price still remains below the 200-day moving average ($4,490/oz), which tempers excessive optimism. Since July 28, gold has gained 6%, coinciding with the Fed's decision to pause rate hikes and the subsequent weakening of the dollar.

Gold supply in 2026 is forecasted at 5,154 tons (+0.2% y/y), with mine production expected to grow by 1.9% and recycling to fall by 4.9%. Jewellery demand fell by 12.4% y/y in the second quarter, but the full-year forecast for 2026 predicts a 1.2% increase. Similarly, demand for bars and coins dropped by 2.7% y/y in Q2, though the annual forecast indicates a 5.4% increase. Significantly, after a 47-ton decline in Q2, demand for gold-backed ETFs is stabilizing, with 2026 forecasts assuming inflows of 230 tons. Central bank purchases remain the strongest support for the market, rising 62.4% y/y to 288.9 tons in Q2, with a full-year forecast of 895.4 tons (+5.6% y/y).

Silver, platinum, and palladium - diverse paths to growth

While gold gained, other precious metals presented a varied picture. Silver, despite an impressive 62.8% year-on-year increase, recorded a slight 0.7% month-on-month decrease in August, reaching a price of $61.62 per ounce. Technically, silver failed to break out of the $54-$64/oz range. However, it is worth noting the Mint Ratio (gold:silver), which currently stands at 69.3:1, close to the 40-year average of 69.9:1, suggesting potential silver strength in the future.

Industrial metals from the platinum group performed significantly better. Platinum rose by 7.5% month-on-month to $1,753 per ounce, recording a 31.4% year-on-year increase. Palladium saw an even larger jump, gaining 9% month-on-month and 22.2% year-on-year to reach $1,383 per ounce.

In the broader market context, the S&P 500 continued its gains, reaching 7,724 points (+2.5% MoM, +21.7% YoY). The USD Index (5-country) weakened by 1.2% MoM to 125.80, which was crucial for metals. WTI Crude Oil rose by 10.6% MoM to $75.83/bbl, and Copper by 6.5% MoM to $14,219/MT, signaling a general recovery in commodity markets.

Decisions and events shaping the coming months

The coming months will be crucial in determining the further direction of the precious metals markets. The primary factor will remain Federal Reserve monetary policy. Investors will closely follow upcoming FOMC meetings, seeking signals regarding future interest rates, especially in the context of the Fed's 2.0% PCE inflation target (the current 10-year inflation swap is 2.29%). Key events will also include inflation data releases (CPI, PCE) and U.S. labor market reports, which may influence central bank decisions. Additionally, any changes in the policies of other central banks and geopolitical events could rapidly shift market sentiment and affect dollar strength, and thus gold's attractiveness as a safe haven.

Investor summary

August 2026 provided a much-needed breather for gold and other precious metals, primarily due to the softening of Fed rhetoric and a weaker dollar. Nonetheless, the market remains in a state of a "Wall of Worry," and investor activity is still limited. For investors, this means a need for caution and monitoring key macroeconomic indicators and central bank decisions. Gold continues to serve as a hedge against inflation and uncertainty, and its future prospects will be heavily dependent on the evolution of monetary policy and the global economic climate.

The content here is for educational and informational purposes only. This material is not investment advice or a recommendation or suggestion of any investment strategy, and it does not provide investment advisory services. OANDA is not responsible for any investment decisions made based on this content. Investing involves the risk of a loss of capital. Past performance does not guarantee future results.