Gold prices surged 13% in August 2026, ending the month at US$4,563 per ounce, as strong exchange-traded fund (ETF) inflows, futures activity and options trading propelled the metal to its third-strongest monthly return in 25 years, according to the World Gold Council (WGC).

The WGC, in its Gold Market Commentary: August 2026, published on September 9, said the August rally was driven largely by momentum factors, particularly widespread ETF buying, alongside a weaker US dollar and increased demand for gold call options.

Global gold ETFs recorded strong inflows during the month. European funds attracted US$7.9 billion, equivalent to 54 tonnes, narrowly ahead of North American funds, which recorded US$7.8 billion, or 53 tonnes.

Asian gold ETFs added another US$2 billion, equivalent to 13 tonnes, to global inflows.

The WGC also reported a significant increase in futures positioning. COMEX net managed money positions rose by 97 tonnes, valued at about US$13 billion, during August, while the “other reportable” category, which the WGC said likely reflects Commodity Trading Advisor activity, increased by 115 tonnes, or US$17 billion.

The August performance followed a sharp rally in gold prices across major currencies. In US dollar terms, gold gained 13.3% during the month, while returns were 12.6% in euros, 13.9% in Japanese yen, 12.7% in pounds sterling and 13.4% in Swiss francs.

Despite the August surge, gold remained below its 2026 record of US$5,405 per ounce, reached on January 29.

Intervention could support gold

Looking ahead, the WGC said potential intervention by US authorities to contain rising government bond yields could have different implications for gold depending on how investors perceive the intervention.

The Council examined historical market data since 2000 to assess how gold performed during periods resembling two hypothetical forms of intervention: a credible intervention and a confidence-eroding intervention.

It found that gold historically performed better when intervention was accompanied by falling real yields and a weaker US dollar.

According to the WGC, only 30 of 1,443 weeks since 2000 matched its criteria for a credible intervention, while 20 weeks matched its confidence-eroding scenario.

The Council said successful intervention would not necessarily be negative for gold because addressing yields does not automatically resolve underlying fiscal concerns.

However, it noted that genuine fiscal restraint alongside capped yields could pose a near-term risk to gold, although it described such a scenario as remote.

Fiscal concerns remain key

The WGC said the longer-term outlook for gold will depend partly on whether markets are convinced that policy interventions can address underlying fiscal pressures.

“If it isn’t, gold probably benefits,” the Council said, adding that if markets become convinced, one of the factors supporting gold’s strong multi-year performance could temporarily weaken.

The Council pointed to high government debt and rising bond yields as a broader global concern, warning that measures aimed at addressing the problem in one market could potentially redirect investment flows elsewhere.

The WGC also noted changing expectations about a possible US Federal Reserve rate hike in September, saying the impact of any rate decision on gold would depend not simply on the rate move itself but on what the decision signals about monetary policy credibility, inflation and the wider yield curve.

The analysis concluded that gold’s appeal is likely to remain supported by investor concerns over rising government deficits and debt until a credible plan to address those pressures emerges.