Phoenix 24
Fiscal anxiety is restoring the ancient safe havens.
New York, United States
Gold and silver have staged a powerful August recovery as investors react to weakening confidence in the dollar, rising United States debt and shifting expectations for Federal Reserve policy. Gold has gained approximately 11 percent during the month, trading near $4,466 per ounce after falling to about $3,942 at the end of June. Silver has advanced even faster, rising roughly 16.5 percent in August to around $66 per ounce. The movement reflects renewed demand for assets perceived as protection against fiscal instability and currency erosion.
Both metals remain below the extraordinary peaks reached earlier in the year. Gold climbed to a record of approximately $5,598 per ounce in January before losing nearly 30 percent, while silver fell by around 55 percent after briefly reaching $121.65. The current rebound has recovered part of those losses but has not eliminated the market’s underlying volatility. Silver remains particularly exposed because its price responds both to investment demand and industrial consumption.
The latest acceleration followed confirmation that US national debt had surpassed $40 trillion for the first time, reaching that threshold earlier than previous projections anticipated. Long-term Treasury yields had climbed to their highest levels since 2007 as investors demanded greater compensation for holding government debt. The Treasury then announced that it would double buybacks of securities with maturities between 10 and 30 years to at least $4 billion per operation. That intervention reduced yields temporarily but also reinforced perceptions that authorities were responding to unusual pressure in the bond market.
A softer dollar and weaker economic data have provided additional support for precious metals. Employment, retail sales and inflation figures led traders to reduce expectations of another immediate interest-rate increase. Lower yields generally strengthen gold and silver because neither metal produces interest, making them relatively more attractive when returns from bonds decline. Central banks and exchange-traded funds have also continued adding to their positions, reinforcing institutional demand.
The rally nevertheless faces risks if inflation remains persistent or if the Federal Reserve resumes raising rates. Higher oil prices linked to tensions involving Iran could complicate monetary policy by increasing inflation even as economic activity weakens. Gold and silver are therefore rising not because markets have resolved their uncertainty, but because investors are paying more for protection against it. The deeper signal is that confidence in US fiscal management is becoming a tradable risk across global markets.
Behind every data point, the intention. / Detrás de cada dato, la intención.