Precious Metals Push Higher (24-28 August)

Gold reached around $4,650 and silver traded above $69, supported by dollar weakness, US fiscal concerns, and lower yields.

Brent held around $93 as tougher Iran sanctions and restricted Hormuz traffic kept supply concerns alive.

The dollar stayed near 98.8 as US debt concerns and Treasury buybacks weighed on the currency. The euro and pound benefited, while expectations for further ECB, BoE, and BOJ tightening stayed firm. In Japan, September hike odds have surged to 82%.

Currencies

Dollar Index: The Dollar Index held near 98.8 after last week’s sharp decline, pressured by US debt concerns. Bessent’s “Treasury twist” aims to influence the yield curve, while new Iran sanctions, July PCE data, and Warsh’s Jackson Hole speech are next.
Euro: The euro climbed above $1.1680, its highest since May, supported by stronger Eurozone activity and a softer dollar. German manufacturing led the August improvement, while inflation expectations eased to 2.9% from 3%, still above the ECB’s 2% target and supporting further tightening expectations.
British Pound: The pound rose above $1.363, a six-month high, helped by dollar weakness. UK inflation reached a four-month high in July despite softer labor data. Pricing points to one BoE hike by year-end and another by April.
Japanese Yen: The yen held near 158.9 per dollar, supported by BOJ hike expectations. The probability of a September increase jumped to 82% from 23% before July’s meeting, with rates seen reaching 1.25%. Deputy Governor Himino speaks Thursday.

Commodities

Gold Rides the Treasury Twist

Gold climbed to around $4,650/oz, its highest since mid-May, as expanded Treasury bond buybacks pressured yields and the dollar. US debt concerns and possible new Iran sanctions added support, with PCE data and Warsh’s Jackson Hole speech next.

Brent Retreats, Supply Risk Stays

Brent eased to around $93/barrel after a strong weekly rally as traders took profits before expected US sanctions on Iran. Bessent promised the “toughest” sanctions in history, potentially restricting supplies further as Iranian shipments have already fallen sharply. Hormuz traffic remains below normal.

Silver Joins the Debt Trade

Silver traded above $69/oz, near a two-month high, supported by US debt concerns and lower yields following expanded Treasury buybacks. Possible Iran sanctions added another supply and inflation risk.

Fixed Income

US 10 Year Treasury Note Yield: The US 10-year yield fell to 4.71% after two sessions of gains. Federal debt has surpassed $40 trillion, while expanded Treasury buybacks provided only temporary relief. July PCE and Warsh’s Jackson Hole speech could shape the rate outlook.
UK 10 Year Bond Yield: The UK 10-year gilt yield rose to around 5.06% as higher oil prices added to inflation concerns. July inflation hit a four-month high despite softer labor data, with one BoE hike priced by year-end and another by April.
Japan 10 Year Government Bond Yield: Japan’s 10-year yield rose to around 2.89%, with September BOJ hike odds at 82%, up from 23% before July’s meeting. The Finance Ministry is also considering raising its assumed fiscal 2027 debt-servicing rate to 3.8%.
Germany 10-Year Bond Yield: Germany’s 10-year Bund yield held near 3.2625%, its highest since March 2011, as higher oil prices added to inflation concerns. Eurozone activity improved in August, led by German manufacturing, while consumer inflation expectations declined for a third month in July.

Economic Data

United States FOMC Meeting

The Fed held rates at 3.50%–3.75% for a fifth straight meeting in July, with three members favoring a 25bp hike. Officials cited solid activity, strong productivity and investment, stable employment, and inflation still above target partly due to energy-related supply shocks.

United Kingdom Inflation Rate

UK inflation rose to 2.9% in July from 2.6%, matching forecasts and reaching a four-month high. A 13% Ofgem energy price cap increase helped push gas prices up 14.7%. Transport and food inflation slowed, with food at 1.3%.

Japan Inflation Rate

Japan’s inflation accelerated to 1.9% in July, its highest since December 2025, as energy subsidies were reduced. Core inflation reached 1.8%, matching forecasts and its highest since March, but stayed below the BOJ’s 2% target for a sixth month.

China Retail Sales YoY

China’s retail sales grew just 0.6% YoY in July, down from 1% and below the 1.5% forecast, as auto sales plunged 17%. Excluding autos, sales rose 2.5%, while January–July growth stood at 1.2%.

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