World gold prices rose sharply in the last trading session of the week, amid a weakening USD and concerns about the US fiscal burden pushing cash flow to the precious metal.
As of 4 am on August 22 (Vietnam time), when the world trading market had closed, spot gold prices increased by 1.99%, to 4,603.30 USD/ounce. Meanwhile, December gold futures contracts increased by 1.97%, to 4,661.60 USD/ounce.
The upward momentum brought gold to its highest level in about 3 months, and also aimed for an increase of about 5% for the whole week. Precious metal prices were supported after the US Treasury Department unexpectedly boosted long-term government bond repurchases, thereby pulling yields and the USD down.
This move increases concerns that measures to curb US borrowing costs could affect confidence in the USD and increase pressure on fiscal outlook. The greenback weakened to its lowest level in about 3 months, thereby supporting commodities valued in USD, including gold.
Usually, reduced bond yields will reduce the opportunity cost of holding gold - an asset that does not yield interest. However, gold still maintains its upward momentum even when US long-term bond yields are still at a high level, showing that cash flow is stronger reflecting concerns about the weakening of the USD and the credibility of US fiscal and monetary policy.
The market also witnessed the return of the trend of investing in assets benefiting from currency devaluation, also known as "debasement trade", as investors turned to gold and precious metals amid the risk of large debt-bearing countries having to accept higher inflation or weaker currencies to cope with fiscal pressure.
Cash flow into gold ETFs also shows signs of improvement. According to Bloomberg data, monitored ETFs added 18 tons of gold in the session on August 21, the strongest increase in one day since September 2025, and aiming for the 5th consecutive week of capital attraction.
However, gold's upward momentum may still face risks from energy price movements. The sharp increase in oil prices this week may increase concerns about inflation, thereby maintaining expectations of tighter monetary policy.
On the market for other precious metals, at the end of the trading session, spot silver price was at 68.987 USD/ounce, up 0.9015 USD, equivalent to 1.32%. Platinum price increased by 2.40%, to 1,881.10 USD/ounce, while palladium increased by 1.11%, to 1,353.25 USD/ounce.
On the energy market, Brent oil closed the session at 93.93 USD/barrel, up 0.16%. Meanwhile, WTI oil decreased by 0.22%, to 86.64 USD/barrel.
