A. SREENIVASA REDDY (ABU DHABI)
Gold delivered a return of 13.3% in August to end the month at $4,563 per ounce, driven mainly by widespread exchange-traded fund buying, futures flows and options activity, according to the World Gold Council (WGC).
Despite the sharp monthly rally, gold’s year-to-date return at the end of August stood at 4.5%, the council said in its monthly Gold Market Commentary.
August marked gold’s third-highest monthly return in 25 years, narrowly below the 14% gain recorded in December 2025.
The precious metal’s performance was supported principally by momentum factors, led by widespread buying through gold-backed ETFs. A weaker US dollar and strong demand for call options also contributed to the price increase, the report said.
Gold ETFs recorded inflows across all major regions during the month. European funds attracted $7.9 billion, equivalent to 54 tonnes of gold, narrowly exceeding North American inflows of $7.8 billion, or 53 tonnes. Asian gold ETFs received inflows of $2 billion, equivalent to 13 tonnes.|
Gold recorded gains across most major currencies during the month. Its return reached 12.6% in euros, 12.7% in sterling, 13.4% in Swiss francs and 13.9% in Japanese yen.
The metal delivered a 9% return in Indian rupees during August, taking its year-to-date gain in the currency to 16.9%.
The council said gold’s performance would remain influenced by investor confidence, movements in the US dollar, inflation concerns and expectations surrounding monetary policy.
Commenting on the WGC data, CA Dhaval Jasani, a Chartered Accountant and financial markets researcher, highlighted the broad-based ETF buying behind gold’s August rally.
“What stands out is the breadth of the ETF buying. Europe and North America each attracted close to $8 billion in the same month, showing that this was not a regional trade but a synchronised reallocation into gold,” Jasani said.
“Simultaneous flows of this scale across regions usually reflect a shared macroeconomic view rather than isolated positioning,” he added.
Referring to the contrast between gold’s 13.3% monthly gain and its 4.5% year-to-date return, Jasani pointed to the pullback that followed January’s record high.
“Gold peaked near $5,405 in late January and then lost ground for several months before rebounding. It shows how a year-to-date figure can mask significant volatility within the year,” he said.
Jasani said the weaker dollar was also an important contributor to the August rally, although movements in individual currencies resulted in varying returns for investors.
“The differences in gold’s returns across currencies show that exchange-rate movements played a meaningful role. Investors should distinguish between currency effects and gold’s underlying fundamentals before extrapolating the rally,” he said.
Looking ahead, Jasani said the main variables would be the direction of the US dollar, inflation data and signals from central banks, particularly the US Federal Reserve.
