Global Markets on Aug 24: Gold Hits Three-Month High as Investors Brace for Jackson Hole

Gold Hits a Three-Month High as Haven and Credit-Hedge Demand Converge During European and US trading on August 22, spot gold in London touched USD 4,648.30/oz, the highest level since May 2026. It settled in New York at USD 4,639.50/oz, up about 4.2% for the week. COMEX gold futures also neared USD 4,690/oz, while silver's weekly gain widened to 7.2%. The rally is being driven by three factors: the US dollar index has weakened for a third straight week, falling below 98.5; the US Treasury expanded its long-bond buyback program, reigniting concerns about fiscal sustainability; and the US-Iran negotiation window closed without a deal, injecting geopolitical risk premium back into the market. Goldman Sachs this week raised its three-month gold target to USD 4,750, arguing that fiscal-dominance logic remains the medium-term theme. Dollar Stays Weak, Non-US Currencies Broadly Rebound The US dollar index closed the week at 98.42, down nearly 2.4% from early August and lower for a third consecutive week. A weaker dollar reduces the cost for non-US investors to hold gold and other commodities, and has lifted the euro, yen, and renminbi against the greenback. Although the July FOMC minutes showed internal disagreement over sticky inflation, the market has almost fully priced in an unchanged rate decision in September and has scaled back expectations for additional rate hikes this year. Traders widely believe the real directional catalyst will be Fed Chair Kevin Warsh's keynote speech at the Jackson Hole Economic Symposium on August 28. US Equities Diverge as Capital Rotates from Tech to Financials and Energy In contrast to gold's strength, US equities displayed clear sectoral divergence last week. The Dow Jones Industrial Average rose 1.21% on Friday to 53,822, gaining 0.34% for the week. The S&P 500 added 0.51% to 7,713 but still fell 0.86% on the week. The Nasdaq Composite slipped 0.18% to 26,131, posting a second weekly decline. Banks, energy, and mining stocks outperformed: JPMorgan rose 3.4% for the week, and ExxonMobil gained 4.1% on the back of higher oil prices. AI compute and semiconductor names saw profit-taking after strong prior gains, with Nvidia down 2.7% for the week. Capital is rotating from crowded high-valuation growth stocks toward lower-valuation cyclicals and financials. Oil Posts First Weekly Gain in Three Weeks as Supply-Demand Rebalancing Emerges International oil prices recorded their first weekly gain in three weeks. WTI crude for October settled at USD 69.85/bbl, up 3.8% for the week, while Brent crude closed at USD 73.40/bbl, up 3.3%. Supporting factors included a fourth consecutive weekly decline in US commercial crude inventories, OPEC+ maintaining a moderate production-increase pace, and residual summer travel demand in the northern hemisphere. Analysts caution, however, that if the dollar strengthens after Jackson Hole or global manufacturing data weaken, the upside for oil prices will be limited. This Week's Focus: Jackson Hole, PCE, and Nvidia Earnings The week ahead is packed with key events. The Jackson Hole Economic Symposium opens on August 28, and Chair Warsh's tone will directly affect the dollar and US Treasury yields. On August 27, the US July core PCE price index, the Fed's preferred inflation gauge, will be released. Also after the close on August 27, Nvidia will report earnings, with its data-center guidance likely to sway sentiment across the AI supply chain. Institutions generally believe that before these variables are resolved, gold's haven premium and the dollar's weak trend are unlikely to reverse quickly.