Gold futures briefly touched $4,720 per troy ounce on Tuesday, the metal’s highest level since mid-May, extending a move that has added roughly $700 per ounce since the start of August. The percentage gain puts August on track for the strongest monthly performance since September 1999, according to UOB.
Three things drove the rally, and they are not equally durable.
The first is the U.S. Treasury’s decision to at least double the size of its liquidity support buyback operations for longer-dated nominal coupon securities, announced August 19. That move aimed to support liquidity in the 10-year to 20-year and 20-year to 30-year sectors and helped ease pressure on long-end yields while weakening the dollar, removing two persistent headwinds gold has faced since January’s record run above $5,600. This effect is real but policy-contingent.
The second is Wednesday’s PCE data, which complicated the picture in both directions. Headline PCE came in at 3.7% year over year, and core PCE held at 3.3% annually, both unchanged from June. Markets read the sticky inflation picture as evidence that the Federal Reserve’s September 15-16 meeting is live for a hike. For gold, that dynamic cuts both ways. Higher real yields are a headwind, but persistent inflation is a tailwind. The net read from the market is that the tailwind is winning for now.
The third driver is the one that matters for a position held beyond the next Fed meeting. Central banks purchased a net 288.9 tonnes of gold in the second quarter of 2026, a 62% increase from the same period a year earlier and a record high for a second quarter in the World Gold Council’s data. Poland, China, Uzbekistan, Kazakhstan, and the Czech Republic were among the largest buyers. That buying happened during a quarter when gold fell sharply, which means official-sector buyers treated the dip as an accumulation opportunity rather than a warning signal. Structural demand at scale does not evaporate after one Fed hike.
The levels: Spot gold was trading around $4,670 on Tuesday after rising to its highest since mid-May. The 200-day moving average sits at approximately $4,490, now acting as support rather than resistance after last week’s cross. Institutional targets cluster in the $4,500 to $4,900 range through year-end. The deciding input is the August CPI release, due September 10, which arrives five days before the Fed meets.
Friday brings Fed Chair Kevin Warsh’s first Jackson Hole policy speech, scheduled for Friday, August 28. He has been deliberately opaque about rate direction since taking office in May, preferring that markets set the tone. Any signal that September is genuinely on the table would pressure gold. A non-committal tone, which is the base case, extends the current bid. GLD and GDX are the cleanest expressions; miners have lagged the metal and carry operational leverage if spot holds above $4,500.
