Gold prices surpassed $4,300 per ounce on August 5, marking a roughly 4% increase and reaching their highest level since June. The rise was driven by renewed demand from China and easing concerns around inflation. Chinese gold-backed exchange-traded funds (ETFs) experienced inflows for 14 consecutive days through August 3, their longest sustained buying period since March, bolstering the precious metal after a sharp correction in the second quarter.
China maintained its position as the world’s largest gold market amid strong official-sector demand. The People’s Bank of China added 33 tonnes of gold during the second quarter, representing its largest quarterly purchase since late 2023. Meanwhile, global central banks increased their bullion reserves, acquiring a net total of 288.9 tonnes in the same period, according to data from the World Gold Council published on July 30.
The gold rally followed indications of progress in diplomatic talks between the United States and Iran. Expectations that tensions in the Middle East may ease contributed to a decline in oil prices, reducing concerns that higher energy costs would reignite inflation pressures and compel the Federal Reserve to sustain restrictive interest rate policies. In addition, lower U.S. Treasury yields enhanced gold’s appeal, as the metal does not pay interest and tends to gain attractiveness when bond yields fall.
In contrast to gold’s strong performance, cryptocurrency markets showed more subdued activity on August 5. Bitcoin and leading altcoins posted moderate gains following a challenging second quarter. Bitcoin’s value declined approximately 14% during Q2 and briefly dipped below $60,000. U.S. spot Bitcoin ETFs saw nearly $5 billion in withdrawals during the quarter, reflecting investor pullback. However, inflows in early August suggested renewed investor interest, reversing some of the risk-off sentiment from earlier months.
The second-quarter downturn also affected publicly traded cryptocurrency firms. Strategy, a notable company in the sector, reported an operating loss of $8.33 billion in Q2, primarily due to an unrealized depreciation in the value of its Bitcoin holdings.