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Informist, Saturday, Aug. 22, 2026

 

MUMBAI – Gold prices rebounded sharply from their July lows, supported by renewed investment demand and unease over the US fiscal outlook. However, this upward trend could be affected by obstacles and market volatility from persistent inflation and the possibility of further tightening of monetary policy by the US Federal Reserve, ING Research said in a report Friday.

 

Gold prices have climbed to around $4,600 per ounce from $4,000 per ounce in mid-July, returning to levels last seen in May. The rise followed the US Treasury's decision to increase its longer-dated debt buybacks, the report said. The maximum size for the 10-to-30-year segment will rise to at least $4 billion from $2 billion, with US Treasury Secretary Scott Bessent signalling that the programme could be expanded further.

 

The bond-market impact proved short-lived, with long-term yields subsequently recovering much of their decline. Gold, however, continued to strengthen, the report said. This resilience suggests that the rally was not a response to lower yields. "The prospect of larger Treasury buybacks has refocused attention on government borrowing and fiscal credibility," the report said. It has also revived concern about currency debasement, reinforcing gold's appeal as a store of value, the report said.

 

A weaker dollar and lower short-term yields helped gold rebound after prices found support. Softer US data have revived expectations of the US Federal Reserve beginning to ease policy in 2027.

 

Global gold-backed exchange-traded funds gained $3 billion, lifting holdings by 23 tonnes and signalling stronger demand, the report cited data from the World Gold Council. Gold recovery continued into August, supported by robust central banks' net purchases reaching 51 tonnes in June. Further market gains will increasingly depend on whether Western investors maintain their renewed interest in gold, the report said.

 

The rally in gold prices will still face headwinds from rising energy prices adding to US price pressures and potential long-term restrictive monetary policy, the report said. The July Federal Reserve meeting minutes showed divided opinions on immediate rate hikes, while others were prepared to support further tightening if inflation remained elevated. Markets will closely watch the Aug. 27–29 Jackson Hole symposium for policy signals. Indications of rate hikes will boost bond yields and the US dollar, weighing on gold. Conversely, focusing on growth or financial stability will support gold prices, the report said.

 

Gold prices are expected to remain at an average of $4,150 per ounce in the fourth quarter of 2026 because of persistent inflation keeping the US monetary policy restrictive and preventing a sustained fall in yields, the report said. However, renewed exchange-traded funds buying, a weaker dollar, and mounting fiscal concerns can clear upside risks to the price outlook.  End

 

Reported by Ritwika Dutta

Edited by Akul Nishant Akhoury

 

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