PCE data surprises, Iran situation settled! Gold consolidates strongly

Huitong Finance, August 26th—— Gold surged 15% this month! Geopolitical factors and unchanged PCE keep gold's strong trend intact.

On Wednesday (August 26th), during the European and US sessions,

In August 2026, the international gold market witnessed an extremely strong rebound, with the gold price surging by 15% in a single month, marking the largest monthly gain in over four months.

This sharp recovery completely reversed the previous prolonged correction in gold, making it the standout commodity in recent trading.

However, looking at the overall price movement, gold still hasn't fully recovered previous losses. Compared to the record high of $5,500/oz reached in January this year, the current price still faces about a 16% correction. The early August low nearly touched $4,600/oz.

Reviewing this round of gold price action, geopolitical tensions had previously created clear headwinds for gold.

Earlier, continued escalation in Iran raised international crude oil prices, prompting widespread concerns about prolonged global inflation and driving expectations for ongoing Fed rate hikes.



However, entering August, macroeconomic conditions have fully shifted, with multiple favorable factors stacking up to drive a strong rally in gold.

Weakening Dollar & Falling US Treasury Yields, No Surprise Jump in PCE

The dual weakening of the US dollar and Treasury yields is the core macro driver behind the latest gold rally.

Currently, the market widely expects the Fed to keep interest rates unchanged, fully reversing previous bearish rate hike expectations.

Compared to interest-bearing financial assets, the disadvantage of holding non-yielding gold assets has greatly diminished, making gold more attractive as opportunity costs fall sharply.


Meanwhile, the US Treasury announced a major policy shift, doubling the size of long-term bond buybacks, with each operation increased to at least $400 million.

This policy will help stabilize volatility in long-term Treasury yields, suppress the rise in long-end yields, and indirectly weigh on the US dollar.

A weak dollar index has significantly lowered gold purchase costs for global overseas buyers, further stimulating global gold consumption and investment demand, and pushing prices even higher.

Global Gold ETF Inflows Resume, Market Sentiment Recovers

Continuous inflows into gold ETFs have been a direct driver of the gold market's rebound.

As market risk appetite and macro expectations reversed, both institutions and retail investors have ramped up holdings in gold assets. According to the latest data from the World Gold Council, global gold ETF holdings continue to expand, with recent increases totaling 23 tons.

Since August, fund inflows have accelerated further, with monthly net additions rising to 45 tons so far. Persistent net inflows into ETFs directly reflect the market’s increased allocation demand for gold, providing solid capital support for rising prices.


(COT report released by CFTC, source: CME Group)

Global Central Banks Continue Gold Buying, Strengthening Price Floor

Global central banks have been regularly increasing gold reserves, reinforcing gold’s long-term value and effectively hedging market volatility risk.

Data shows that in Q2 this year, global central bank gold purchases reached 288.9 tons, a year-on-year increase of 62%, signaling explosive growth in official demand.

Korea’s central bank returned to the gold market for the first time in 13 years, further confirming the ongoing central bank gold-buying wave.

World Gold Council research highlights long-term industry trends: 89% of surveyed institutions expect global gold reserves to keep increasing in the next year, while a record 45% of surveyed central banks have clear plans to further expand gold holdings.

Long-term, stable, and large-scale gold purchases by central banks have greatly reduced downside risk for gold, helping lay the foundation for this rally’s price floor.

Summary & Immediate Analysis:

This month’s 15% gold rally is the result of capital inflows, official demand, and a macro monetary policy shift—a triple resonance marking a phase reversal in the gold market.

However, it should be noted that precious metals are highly volatile, and sharp short-term surges may be followed by technical corrections.

From a technical perspective, spot gold is experiencing a slight pullback, with current support at the 5-day moving average and resistance near the upper box range. The next resistance is around the Fibonacci 0.786 level at 4749.


(Spot gold daily chart, source: Easy Huitong)

Beijing Time 20:58, spot gold was quoted at $4,614/oz.