Gold Monthly for August 2025

Gold prices have been consolidating over the past few months, and July was no exception. The yellow metal exhibited resilience in the first half of the month, reaching a peak of $3,433 per troy ounce, just 1.8% below its all-time high. However, toward the end of the month, prices retreated, closing flattish with -0.4% change on a month-over-month basis. This movement occurred against a backdrop of impending tariff deadlines, ongoing trade negotiations, and persistent geopolitical risks. The U.S. Dollar remained firm, appreciating by approximately 1.3% during the month, supported by steady economic data and renewed investor confidence. Meanwhile, U.S. Treasury yields climbed from 4.2% at the end of June to 4.4% by the end of July, reflecting the market’s expectations of slower change in Fed’s policy stance. On the currency front, the Indian Rupee depreciated by 2.1% against the U.S. Dollar, driven by trade-related pressure and the broader strength of the greenback.

Temporarily, at least, global markets have gained a degree of clarity on the international trade front. A new U.S.–EU trade agreement was announced, covering a broad range of imports. Much like the earlier agreement between the U.S. and Japan, this deal includes large, headline-grabbing figures—notably, $750 billion in EU commitments to purchase U.S. energy over three years, and $600 billion in EU investments in the U.S.—appears more symbolic rather than binding. The 90-day tariff pause, originally announced by President Trump, expired on July 9th, but was followed by a string of successful U.S. trade negotiations with countries including Vietnam, Japan, the EU, and other Asian nations. These developments significantly boosted market sentiment and contributed to continued strength in the U.S. Dollar.

This dollar strength translated into downward pressure across commodities and metals markets, with gold being particularly affected. However, buying interest from Asia remained firm, and much of the selling pressure was absorbed during Asian trading sessions, helping gold maintain a degree of support despite the broader negative trend.

While macroeconomic indicators emerging from the United States continued to showcase steadiness in employment and inflation trends, the latest jobs report reveal the cracks in the economy. Job growth was just 73,000, the weakest monthly gain in over two years and well below expectations. Downward revisions erased 258,000 jobs from May and June, strongly suggesting prior job market health was overstated. Unemployment rose to 4.2%, up from 4.1%, and the labor force participation rate fell to 62.2%, it’s lowest since late 2022, meaning fewer people are either working or seeking work. Job gains were narrowly concentrated in health care and social assistance, while other sectors shed jobs.

In its meeting held in July, the Federal Reserve decided not to lower the interest rates. After a series of rate cuts, this was the fifth consecutive meeting where Fed decided to keep the rates steady. Jerome Powell stuck to his earlier stance of seeing the real impact of tariffs and trade deals and made a decision on rates cut backed and supported by the data.

Outlook

Recent developments in global trade have brought a measure of clarity, as the United States finalized trade agreements with several key nations. These deals—particularly with the European Union, Japan, and several Asian economies—have improved short-term sentiment. However, much of the attention surrounding these agreements focuses on symbolic, inflated commitments, such as $750 billion in EU energy purchases and $600 billion in investments into the U.S., numbers that are more political theatre than concrete pledges.

Still, uncertainty has not disappeared. A critical deadline looms on August 12, when the U.S. and China must atleast extend the existing truce, initially agreed upon in mid-May. A 90-day extension of the current terms is the market’s base case—but nothing is guaranteed.

Adding to this fragile landscape is the Russia–Ukraine conflict. President Trump has issued a shortened timeline for Russia to agree to a peace deal—with the threat of secondary sanctions on nations importing Russian goods if no deal is reached within 10 days. Overall, while headline trade risks have diminished, the possibility of disruptive policy surprises remains. For gold, this translates into reduced safe-haven demand—at least temporarily in absence of any disruptions.

Weaker dollar has been a consensus trade of the past two months. In response to the trade deals symbolically in favor of the US and a slightly-more-hawkish than expected Fed has led to some pull back in the US dollar which could keep gold under pressure. However, there are several factors that could shift this narrative. Any signs of economic slowdown in the US (as indicated by the recent jobs report) or globally could lead to increased speculation around rate cuts by the Federal Reserve. Such a shift in monetary policy stance would likely weaken the dollar and reduce yields, creating a more favourable environment for gold.

Overall, while the short-term outlook suggests continued consolidation or possibly mild weakness, the medium- to long-term trajectory remains still optimistic. Gold’s traditional role as a safeguard against uncertainty, inflation, and currency depreciation continues to underpin its value in a diversified investment portfolio.

Above article is authored by Quantum.

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