The price of gold is staging a rebound, rising 12% between the end of July and 20 August.
Having stuttered during July with gains of just 0.85% over the course of the month, August’s gains potentially put the gold rally back on track. The precious metal has now gained 4.9% since the end of 2025, though it is still well below the all-time high of $5,595.46 per troy ounce reached on 29 January.
While gold is typically viewed as a safe haven during times of crisis, its gains during 2025 made gold holdings an obvious asset for liquidity-hit investors to sell once the conflict in Iran broke out at the end of February.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Start your trial
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The selloff didn’t start with the conflict in Iran, but rather Trump’s nomination of the relatively hawkish (favouring tighter monetary policy and relatively higher interest rates) Kevin Warsh as chair of the Federal Reserve (Fed), the US central bank.
Latest Videos FromMoneyWeek
Since his appointment, rising inflation and a sturdy US economy have constrained Warsh from cutting US rates, which saw gold prices fall.
“The recent pullback in gold, silver and mining equities has prompted questions over the outlook for the precious metals sector, which just months ago was hitting all-time highs,” said Mark Burridge, managing partner at precious metals fund manager Baker Steel.
But, he argues, pullbacks like the one that gold has seen since February are normal aspects of any bull market, “shaking out speculative positioning, resetting sentiment and, most importantly, creating opportunities for long-term investors.
“Far from signalling the end of the bull market, we consider that recent weakness has set the stage for the next phase of the up-cycle,” Burridge added.
Why has the gold price risen?
Gold appears to have responded positively to a sudden intervention from Donald Trump’s government in the bond market.
US Treasury secretary Scott Bessent said on 19 August that the US government would double its purchases of long-term US bonds, in a bid to dampen rising yields on Treasuries (US government bonds).
“Treasury yields fell initially, the US dollar dropped sharply and gold prices rallied,” said Alex Rohner, fixed income strategist at private bank J. Safra Sarasin Sustainable Asset Management.
Treasury yields were back on the rise again by 20 August, but the dollar has been rocked by the move. The US dollar index – which measures the US dollar against a basket of other major currencies – fell 0.83% on 19 August and only rose 0.06% the following day.
Gold – which is priced in dollars – has responded positively, gaining 4.34% on 19 August and 0.08% on 20 August.
How to gain exposure to gold prices
If you are considering where to invest and want to add some gold exposure, there are three main approaches.
The first one is investing in the metal itself through a financial contract, such as an ETF or exchange-traded commodity (ETC).
See our article on the best gold ETFs for more information.
You can also get indirect exposure by investing in the miners that dig gold out of the ground. This can be done by investing directly in their shares, or by buying a gold fund or investment trust.
Lastly, you can buy physical gold bars or gold coins.
In terms of how much gold to hold in a portfolio, Tom Stevenson, investment director at Fidelity International, suggests around 5-10% – which is about the same as you might hold in cash.
“The two offer insurance and dry powder to complement the growth and stability of the shares and bonds that make up the bulk of a balanced portfolio,” he said.
