What will happen to gold prices this August?

CBS News

2 days ago

While it may seem like the price of gold has been on a bit of a rollercoaster ride in recent years, that interpretation is a bit misleading. Rollercoasters, after all, rise and fall, but gold prices have only been increasing for much of 2024 and 2025. Absent some minor declines, the price of gold is up by around 40% from where it was one year ago. Put otherwise, the price of the metal has moved from $2,409.39 last summer to over $3,300 now, offering a unique opportunity for investors looking to turn a quick profit via an asset traditionally known more as an income protector versus an income producer.
To better position themselves for success, then, both existing investors and those just getting started in the precious metal market will be understandably interested in the gold price forecast for August. But what could happen to gold prices this month? Below, we'll take a closer look at what investors can expect (and what they should do in the interim).
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Investors have become so accustomed to gold prices steadily rising that the concept of the price stagnating this August sounds like a foreign one. And while predicting the future price of any asset is inherently uncertain, particularly for precious metals like gold, that seems the safest assumption this month. That's due to a variety of factors:
Interest rates are on hold: The Fed's decision to keep rates unchanged until it meets again in mid-September isn't likely to impact gold prices negatively or positively. After all, rate cuts often cause gold prices to move upward as investors look for other locations for their money as returns elsewhere decline. That often causes the price of gold to increase. Conversely, rate increases can cause it to rise (though not always). With rates remaining where they are for the foreseeable future, however, gold prices may not move too far off the $3,300 per ounce range they're starting August listed at.
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Inflation readings may be difficult to parse: Inflation is now at 2.7%, almost a full percentage point above the 2% goal the Federal Reserve has spoken about as motivation for additional rate cuts. Still, that's significantly lower than the 9%-plus rate from 2022. But it's hard to tell where the next inflation reading will fall when it's released by the Bureau of Labor Statistics on August 12. A significant spike there could cause gold prices to rise, but if the inflation rate stays where it is or declines slightly, the impact on the gold price market is likely to be muted.
Demand for portfolio diversification may evolve: A demand for portfolio diversification can cause the price of gold to rise, as was seen in recent years, as investors looked for safe-haven assets that could assist them in hedging against inflation. But stock market performance recently has been strong, even if it followed significant volatility in the spring. Where this leaves portfolio diversification demands, then, and thus, the price of gold, remains to be seen. With inflation cyclical, however, savvy investors may still want to add gold to their portfolio for the future.
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There are signs that gold's price could rise this August, but equally strong indicators that imply a decline or even a bit of stagnation. Against this backdrop, then, investors should remember what gold can (and can't) do for their portfolio and instead adjust their investing approach to incorporate long-term gold holding versus being overly concerned about daily price changes that will be difficult (if not impossible) to exploit effectively.