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Tuesday, August 25, 2026
What’s happening: Gold traded higher this morning, extending gains recorded in the previous session.
What happened: The yellow metal surged to its strongest level in over three months on Monday, following the US Treasury’s recent buyback announcement.
Weakness in the US dollar lent further support to gold prices ahead of inflation data and Fed chief Kevin Warsh’s speech at the Jackson Hole Symposium.
Why it matters: Gold prices climbed more than 5% last week following the US Treasury Department’s buyback plan, which sent the greenback to multi-month lows. Weakness in the US dollar makes metals cheaper for foreign currency holders and boosts demand for gold.
The US Treasury Department announced plans last week to double repurchases of 10-year, 20-year and 30-year debt after the 30-year yield jumped to its strongest level since 2007. US Treasury Secretary Scott Bessent also signalled prospects of increased buybacks.
Gold-backed ETFs saw strong inflows last week, attracting 46.7 metric tons ($6.4 billion) during the period. This marked the strongest weekly demand in 10 months, the World Gold Council said.
Upbeat economic data released by the US eased overall market concern, with the highest growth in services activity in around two years and sharp growth in overall business activity. This lowered speculations of the Federal Reserve raise its benchmark interest rates this year.
Inflation remained in focus with oil prices recording sharp gains last week after US President Donald Trump warned of economic sanctions on Iran’s trading partners.
Weakness in the US dollar this morning lent further support to gold prices. The US dollar index, which measures the greenback’s performance versus a basket of major peers, slipped to 99.00 this morning.
Spot price for gold jumped 0.3% to $4,660.20 this morning, after hitting $4,680.70, its strongest level since May 14, on Monday.
In other metals trading, spot price for silver fell 0.3% to $68.7895 an ounce. Platinum price slipped 0.1% to $1,878.95, while palladium edged lower to $1,355.30.
What to watch: Data on PCE price index, the Fed’s preferred inflation gauge, and Fed chief Kevin Warsh’s speech at the Jackson Hole symposium this week will remain in focus.
The core PCE price index in the US, which surged by 3.3% year-over-year in June, is expected to rise by 3.3% again in July.
Context: The Canadian dollar fell versus the US dollar this morning, amid US-Canada trade war concerns.
Details: US President Donald Trump announced plans to increase tariffs on all cars, trucks and automotive parts from Canada to 50% beginning January 1, 2027. The announcement sparked trade war concerns following the collapse of negotiations last week.
US vehicle production is heavily dependent on parts and vehicles made by Canada. Higher tariffs translate to an increase in production costs for US automakers. The US also imposed 50% tariffs on Canadian furniture, plastics, plywood and electrical equipment.
Canada is expected to announce retaliatory tariffs versus the US on Tuesday.
Meanwhile, data released on Monday showed that Canada’s manufacturing sales declined 0.2% in July, following a 0.1% gain in June, according to preliminary reading.
Weakness in the US dollar lent support to the loonie. The US dollar index, which measures the greenback’s performance versus a basket of major peers, slipped to 99.00 this morning.
Higher price of crude oil, one of Canada’s major exports, also provided support to the Canadian dollar. Spot price for WTI crude oil gained 0.8% to trade at $85.27 per barrel this morning.
The USD/CAD forex pair rose around 0.1% to 1.3852 this morning.
What to watch: Investors will continue monitoring tariff-related announcements.
Data on wholesale sales (1630 UAE Time) from Canada will be released today. Wholesale sales, excluding petroleum and hydrocarbon products, which surged by 2.8% in June, are expected to decline 1.3% in July.
Other Markets: European indices closed mixed on Monday, with the FTSE 100 and STOXX Europe 600 Index up by 0.01% and 0.35%, respectively, and the DAX 40 and CAC 40 down by 0.11% and 0.37%, respectively.
The UK announced plans to share classified weapons information with Ukraine to help it build the Storm Shadow long-range cruise missile. The news sent the USD/RUB pair higher in forex trading this morning.
South Korea’s composite consumer sentiment index declined 2.3 points from the previous month to a reading of 104.5 in August, which lent support to the USD/KRW forex pair.
Chile’s producer inflation surged 20.5% year-over-year in July, up from 19.7% in the previous month, which sent the USD/CLP pair higher in forex trading this morning.
Taiwan’s M2 money supply rose 7.42% year-over-year to TWD 70,225 billion in July, easing from an 8.13% surged in June, which lent support to the USD/TWD forex pair.
Singapore’s annual inflation rate accelerated to 2.2% in July from 1.9% in the prior month. This being the highest inflation rate since August 2024 sent the USD/SGD pair higher in forex trading this morning.
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