Prices Remain Below Record Highs, but Safe-Haven Demand and Central Bank Buying Offer Support
Key Highlights
- International gold is trading around 20 per cent below its January 2026 record high.
- Gold touched a peak of about $5,602 per ounce in late January and is now near $4,500.
- Prices have recovered more than 10 per cent from late-July lows.
- Indian gold remains roughly 10 per cent below its January record level.
- Investors who bought gold in India in December 2025 are still sitting on gains of around 20 per cent.
- Higher US Treasury yields and uncertainty over interest rates continue to pressure bullion.
- Geopolitical tensions, central bank purchases and inflation concerns are supporting prices.
- US 30-year Treasury yields recently climbed to around 5.33 per cent.
- Investors are closely watching upcoming Federal Reserve decisions and the Jackson Hole symposium.
- Analysts say gold’s long-term bullish structure has not yet broken.
New Delhi, August 22: Gold may be trading well below its record highs, but the broader long-term bullish case for the precious metal remains intact as investors weigh high bond yields and interest-rate uncertainty against geopolitical risks, central bank buying and inflation concerns.
International gold, which touched a record high of around $5,602 per ounce in late January, is now trading close to $4,500, leaving it roughly 20 per cent below the peak. However, the metal has recovered more than 10 per cent from its late-July lows, suggesting that buyers continue to emerge during deeper corrections.
Indian Gold Has Held Up Better
The picture has been comparatively stronger for Indian investors. Domestic 24-carat gold had touched a record of about ₹1,76,306 per 10 grams on January 29 and is now near ₹1,59,115, around 10 per cent below that level. Investors who bought in December 2025 remain up roughly 20 per cent, helped partly by domestic currency movements.
The biggest near-term challenge for gold remains high interest rates. US 30-year Treasury yields recently touched about 5.33 per cent, making interest-bearing dollar assets more attractive relative to gold, which generates no yield. At the same time, the US government’s rising debt-servicing burden has drawn attention to longer-term fiscal risks.
Oil, Inflation Add Complexity
Geopolitical tensions in the Middle East have also pushed crude oil above $93 per barrel, increasing inflation concerns. Persistently high inflation could make it harder for the US Federal Reserve to reduce interest rates aggressively, which would normally be negative for gold.
Expectations for monetary easing have already shifted substantially this year. Markets entered 2026 expecting multiple rate cuts, but stronger inflation and geopolitical uncertainty later reduced those expectations. Investors are now focused on upcoming Federal Open Market Committee meetings for clearer signals on the path of rates.
Safe-Haven Demand Provides Support
Despite macroeconomic pressure, gold continues to receive support from three major sources: geopolitical uncertainty, sustained central bank purchases and concerns that inflation could remain elevated. Weakening US fiscal conditions and rising government debt are also strengthening gold’s appeal as a long-term hedge.
Kotak Securities AVP for Commodity Research Kaynat Chainwala said gold’s consolidation around $4,500 reflects a tug of war between resilient demand and macroeconomic pressure. Safe-haven demand, central bank buying and ETF flows continue to provide a base.
Attention will now turn to the Jackson Hole Economic Policy Symposium, where fresh signals on the US rate outlook could influence the next major move in bullion.
