On the evening of August 5, 2026, the international precious metals market witnessed a rare "violent surge." London spot gold broke through the $4,100 and $4,200 levels within a few hours, with intraday gains approaching 4.5%, marking the largest single-day increase since February 2026; in the Asian session the next day, gold prices further touched above $4,300, the first time since June 18. At the same time, spot silver rose by more than 4% to above $62, with the precious metals sector collectively strengthening, instantly igniting market hedging sentiment.
This round of sharp rise is not without trace. Analysis from multiple institutions shows that the forces driving gold's "overnight surge" mainly come from three aspects: significant cooling of the US labor market, international oil prices plummeting due to geopolitical easing, and the solid bottom formed by continuous global central bank gold buying. The resonance of these three factors has opened up upward space for gold, which had been ranging between $4,000 and $4,150 for over a month.
Triple Positive Catalysts: Why Did Gold Prices Surge "Unstoppably" in One Day?
First Catalyst: US Employment Data "Pours Cold Water," Rate Hike Expectations Quickly Fade
The direct catalyst was the cooling signals from the US labor market. The latest data shows that June JOLTS job openings fell from 7.53 million to 7.35 million, showing "moderate cooling" in employment demand; more critically, July ADP private employment only increased by 44,000, far below the market expectation of 70,000, and the previous value was also revised downward. Data released caused market bets on a September Fed rate hike to quickly drop from 80% to between 53% and 58%, instantly loosening the "rate hike narrative."
Gold itself does not generate interest, and the expectation of tight monetary policy has weakened, meaning the opportunity cost of holding gold has decreased, which directly benefits gold prices. TD Securities senior commodity strategist pointed out that market expectations for US-Iran agreement and concerns about broader economic risks have jointly pushed precious metals higher; and the level of gold prices has triggered short covering, algorithmic buy orders have been activated one after another, further amplifying the gains.
Second Catalyst: Oil Prices Plunge 5% in One Day, Inflation Expectations Cool
Another major driver comes from the energy side. The market reported that the US and Iran may reach a temporary agreement, and the Hormuz Strait may reopen, causing international oil prices to plummet by more than 5% in a single day, with WTI crude retreating to around $74 per barrel, and Brent crude falling to around $78. The "lower oil prices → lower inflation expectations → 10-year US Treasury yields falling" logical chain has been fully played out, reducing the opportunity cost of holding gold and significantly increasing the appeal of hedging assets.
Third Catalyst: US Dollar Index Breaks Below 100, Central Bank Buying Provides Support
At the same time, the US dollar index broke below the 100 psychological level, making dollar-denominated gold relatively stronger. More noteworthy is the official sector's buying: the People's Bank of China has been increasing gold for 20 consecutive months, and the Bank of Korea has resumed gold purchases for the first time in 13 years; data shows that global central banks net purchased 289 tons of gold in the second quarter, a 62% year-on-year increase. This "national team" level of continuous buying provides a solid bottom for gold prices and also confirms the structural demand under the trend of de-dollarization.
Vietnam Gold Market Follows the Rise: SJC Gold Bars Once Approached 143 Million Vietnamese Dong/Two-Tael
With the sharp rise in international gold prices, the domestic Vietnamese market quickly followed suit. On the morning of August 6, Saigon Jewelry Company (SJC) raised both buying and selling prices for gold bars by 1.5 million Vietnamese dong per two-tael, quoting 140.3 to 143.3 million Vietnamese dong per two-tael, reaching a new high in nearly two weeks; DOJI, PNJ, Phu Quý Jewelry and other major brands also raised prices in tandem, with DOJI gold bars once quoted at 140 to 144 million Vietnamese dong per two-tael, the highest in the entire market. By the afternoon of the 6th, SJC gold bars fell back to 139.7 to 142.7 million Vietnamese dong per two-tael, still an increase of 900,000 Vietnamese dong per two-tael from the previous close.
Notably, the premium gap between domestic Vietnamese gold prices and international gold prices is rapidly narrowing. Since reaching a historic high premium of 32.1 million Vietnamese dong per two-tael on March 20, this gap has been reduced by more than 84%, returning to a low point in over a month. Analysts point out that the convergence of premiums reflects that market sentiment in the domestic market is becoming more rational, and also shows that the State Bank of Vietnam's strengthening of gold market management and policy to narrow the price gap between domestic and international markets is taking effect. For Vietnamese investors, while the sharp rise in gold prices is exciting, looking back at the fluctuations since the beginning of the year, those who chased highs still bear considerable paper losses—this reminds the market: although the hedging logic of buying gold has not changed, timing and risk control are equally important.
Retail Sector Also Heats Up, Wall Street Collectively Bullish
The retail sector is also feeling this enthusiasm. On August 6, gold prices from multiple major brands in China surged overnight: Lao Miao Gold pure gold jewelry quoted 1,299 yuan per gram, a single-day increase of 63 yuan; Chow Sang Sang and Lao Feng Xiang quoted 1,295 yuan and 1,293 yuan respectively, with single-day increases of nearly or over 60 yuan, 4 to 10 times the normal daily fluctuation range. This indirectly confirms that while high gold prices suppress physical consumption demand, the "enthusiasm for buying gold" has not diminished—more funds are shifting toward investment products like gold bars and ETFs.
At the institutional level, major investment banks are generally optimistic about the future of gold. Deutsche Bank's strategy team reiterated in its latest report that the "explosive price behavior" phase that gold entered in August 2024 is continuing; measured by the BSADF statistical indicator, the gold market is still in a statistically significant bull explosion period; the bank believes that the 2026 gold price low point may have already appeared and maintains its year-end target of breaking through the $4,600 level. UBS's forecast is more aggressive: if the Fed avoids further rate hikes, investment demand recovers, and central banks maintain strong buying, gold prices could reach $4,400 in September, $4,600 in December, and further look toward $5,000 in March 2027 and $5,200 in June 2027. Citigroup gives a benchmark scenario target of $4,500 in the fourth quarter and $5,000 in the first half of 2027. State Street Global Advisors and Sucden Financial also believe that structural factors such as central bank gold buying, Asian physical gold demand, and long-term geopolitical uncertainties will continue to support gold prices.
Why is the Market Still Buying Gold at This Moment?
- Hedging demand: Repeated geopolitical situations make gold's role as the "ultimate hedging asset" irreplaceable
- Inflation hedging attribute: With fluctuations in oil prices and general commodity prices, gold has historically been a classic tool to hedge against purchasing power erosion
- Central bank endorsement: Global central banks continue to increase reserves, official demand provides a structural bottom for gold prices
- Policy expectations: Fed tightening expectations have cooled, reducing the opportunity cost of holding gold
- Asset allocation: In a high-volatility environment, gold's low correlation with stocks and bonds can effectively diversify portfolio risks
Risks Remain: Non-Farm Data and Fed "Hawkish Hidden Mines"
However, amidst the celebration, risk signals cannot be ignored. First, the temporary agreement for the Hormuz Strait has not been finally concluded, and international shipping companies and energy traders remain cautious; if negotiations fail, oil prices may rebound again, disturbing inflation expectations. Second, hawkish voices within the Fed remain: Governor Cook explicitly stated that "if the inflation decline trend does not recover, I support rate hikes," and Minneapolis Fed President Kashkari also called for early interest rate adjustments, meaning that behind the single-day surge still lie policy variables.
In the short term, market focus will be on the US July non-farm employment report released on Friday. The market expects about 80,000 to 90,000 new jobs, with the unemployment rate expected to rise slightly from 4.2% to 4.3%. Analysts point out that if non-farm data is below 70,000, gold prices may challenge $4,300 and further target $4,360 or even $4,418; if data falls within the expected range, gold prices may consolidate between $4,200 and $4,300, waiting for August 12 CPI data to confirm direction; but if non-farm data exceeds 100,000, gold prices may retest the $4,150 to $4,180 support, or even again test the $4,053 watershed.
Conclusion: The Core Logic of Buying Gold Has Never Changed
Looking back at the turbulent waves of gold prices in 2026—from approaching $5,600 in late January, to testing $3,942 in late June, to the strong counterattack in early August—the market has interpreted gold's dual character through violent fluctuations: both a safe haven in crises and an amplifier in extreme emotional times. But regardless of short-term fluctuations, the long-term logic supporting "buying gold" has not changed: the center of global geopolitical risk has risen, fiscal pressure in major economies is high, the trend of de-dollarization and central bank gold purchases continues, these structural forces are still the underlying basis for gold as a core asset allocation.
For ordinary investors, what should be警惕 at this moment is the impulse of "chasing highs and selling lows." As various institutions repeatedly remind, current gold price fluctuations are severe, and risks in spot and derivatives trading are high. Instead of betting on daily price movements, it is better to adopt a rational allocation mindset, incorporating gold into the overall asset portfolio to hedge against inflation and geopolitical uncertainties—this is the simplest and most solid answer to "why buy gold."
