Gold prices gained traction in August, rising over 9% as macroeconomic data reduced pressure on the Federal Reserve to raise interest rates. A benign July inflation report, softer U.S. employment figures, and progress toward reopening the Strait of Hormuz have collectively lowered the odds of a September rate hike to below 40%, according to the CME FedWatch tool.

The shift in rate expectations has alleviated some pressure on the dollar and yields, which had previously undermined demand from rate-sensitive Western investors. However, policymakers remain constrained by headline inflation that was 3.4% higher than a year earlier and 1.4% above the Fed’s target.

What the Numbers Show

The rebound in gold is supported by divergent flows between Western institutional investors and Asian buyers. While North American participation remained modest, European funds led the buying, with the World Gold Council recording around $3 billion in net inflows to physically backed gold exchange-traded funds. This influx lifted total holdings to 4,068 tons, helping absorb sales by Western money managers during earlier corrections.

Brent Johnson, CEO of Santiago Capital, noted that gold’s rise does not depend on a collapse in the dollar or hyperinflation. Instead, reserve diversification, geopolitical insurance, and physical demand sustain the metal even as the dollar remains central to global finance.

Technical Outlook

Despite the fundamental support, technical confirmation remains pending. Gold repeatedly found buyers below $4,000 during the selloff and has since converted the $4,200 area from resistance into support. Ola Hansen, Head of Commodity Strategy at Saxo Bank, identified secondary support near $4,360 as the level to watch if momentum fades.

The crucial technical test lies near $4,500, where the declining 200-day moving average sits. A durable move above this level would break a sequence of lower highs and shift attention to the 38.2% Fibonacci retracement near $4,585. The next target would be around $4,695, representing the 50% retracement of the January-to-July decline. Failure at $4,500 could leave gold in broader consolidation, reviving focus on the $4,000-to-$3,960 support zone where historical demand has defended prices.

Gold has decisively broken the $4,200 per ounce barrier, signaling a likely close above the 50-day moving average — a key technical level not crossed since nearly a year ago when the metal traded around $3,350. This surge marks one of the best days of the year for the precious metal, driven by geopolitical optimism regarding a potential Hormuz agreement and evolving expectations surrounding Federal Reserve interest rate policy. The move suggests a return to metal hoarding strategies among miners, who are benefiting from long-term price appreciation rather than immediate sales.

The rally comes as President Donald Trump expressed optimism that a Hormuz deal could be finalized within 48 hours. While oil prices influence miner margins, the connection between gold and foreign policy runs deeper than cost inputs. Despite the Federal Reserve holding rates steady at its July 28 meeting, where three Committee members voted for a 25 basis point hike, market sentiment has shifted. The CME FedWatch tool currently places the odds for the September 16 meeting at 55-45 in favor of a rate hike, an overhang that typically pressures non-yielding assets like gold.

Miner stocks responded strongly to the breakout. Agnico Eagle Mines rose over 9.5%, while Newmont gained approximately 7%. The VanEck Gold Miners ETF (GDX) also surged around 7.2%, reflecting a clean technical breakout noted by Azuria Capital founder Tavi Costa. These gains highlight the sector’s sensitivity to both spot price movements and broader macroeconomic signals.

Miner Performance

Strategic Hoarding Trends

The rally has reignited interest in physical hoarding strategies among mining companies. According to author John Rubino, some firms are moving excess metals onto their balance sheets to benefit from long-term appreciation instead of selling immediately. First Majestic Silver exemplifies this approach; its finished goods inventory increased from 676,637 silver ounces and 2,732 gold ounces as of March 31, 2026, to 1,007,450 silver ounces and 4,730 gold ounces recently.

This strategy mirrors tactics used by legendary Canadian mining executive Robert McEwen during his tenure at Goldcorp in the early 2000s. McEwen withheld approximately 10% to 15% of annual output, believing the metal was undervalued. When liquidated in late 2003, this reserve doubled quarterly net earnings and enabled a special dividend for shareholders, demonstrating the potential upside of retaining physical inventory during bull markets.