Gold SWOT: Dollar Concerns Are Strengthening the Outlook for Further Gold Gains

Strengths

• The best-performing precious metal for the past week was palladium, up 5.30%, on persistent supply constraints from South Africa and Russia. Meanwhile, share prices for South African precious-metal miners are on track for their best month on record. The FTSE/JSE Precious Metals and Mining Total Return Index has surged 38% in August, putting it on track for its strongest monthly performance since records began in 2006. AngloGold Ashanti, Pan African Resources and Gold Fields have each gained more than 40% month-to-date, highlighting strong investor momentum across the precious-metals mining sector, according to Bloomberg.
• Gold ETFs saw their biggest inflow since October 2025, with $7.3B flowing in during the week ended August 26, according to BofA, citing EPFR Global data. Gold is heading for its biggest monthly gain this century after advancing nearly 14% in August, according to Bloomberg, fueled in part by a U.S. Treasury intervention in the bond market that revived the debasement trade.
• China’s gold accumulation may be significantly higher than official figures suggest. China is estimated to have acquired 88 tons of gold through the London OTC market in May and June, including roughly 40 tons in June, compared with the 15 tons officially reported for the month. The accumulation comes as Beijing reduces its U.S. Treasury holdings and expands gold reserves, reinforcing the broader trend toward central-bank diversification into physical bullion.

Weaknesses

• The worst-performing precious metal for the past week was silver, down 4.65%, as Fed Chair Kevin Warsh emphasized the need to bring inflation back to the Fed’s 2% target. Spot gold and silver fell 3% and 4%, respectively, following his Jackson Hole speech Friday morning. Zhaojin Mining also reported weaker-than-expected gold production. First-half attributable net profit rose 10% year-over-year (YoY) to RMB1.58B, but first-half earnings were only 30% of full-year market consensus estimates, with UBS citing lower-than-expected gold production and investment losses.
• Gold’s elevated valuation relative to Treasuries raises reversion risk. Bloomberg Intelligence warns that gold could face a prolonged period of underperformance following its surge above $5,000 an ounce in the first quarter (Q1). Gold’s premium relative to long-term U.S. Treasury bonds has reached its highest level since 1987, suggesting stretched valuations and increasing the risk of a potential reversal.
• Sibanye Stillwater’s production and earnings fell short of expectations. South African gold production came in 5% below UBS estimates, while U.S. platinum group metal (PGM) production was 4% below forecasts. EBITDA from both businesses also missed expectations, reflecting weaker operational performance across key precious-metals assets, according to UBS.

Opportunities

• Agnico Eagle Mines agreed to invest C$57.2M (approximately US$41.5M) for a roughly 10% stake in Radisson Mining Resources, providing funding for underground exploration at Radisson’s flagship Quebec gold project. The investment brings backing from a major gold producer and could help advance exploration and unlock additional value at the project, according to Dow Jones.
• Dollar concerns are strengthening the outlook for further gold gains. Crédit Agricole expects gold to return to $5,000 an ounce by year-end and extend gains into 2027, citing concerns that U.S. policies could further undermine confidence in the dollar. Continued pressure on the greenback could reinforce demand for gold as an alternative store of value.
• Northam Platinum could benefit from competitive merger and acquisition (M&A) interest. Northam received an unsolicited approach from a major South African platinum group metal (PGM) producer regarding a potential asset- or corporate-level transaction. The company plans to engage additional potential counterparties, a move Morgan Stanley believes could create a competitive bidding process and help maximize transaction value for shareholders.

Threats

• Thailand is considering a new low-rate tax on certain gold transactions, potentially including imports, as authorities seek to curb money laundering and improve financial oversight. The Finance Ministry plans to consult with the Gold Traders Association. Any new tax could increase transaction costs and weigh on domestic gold activity.
• Gold Fields faces uncertainty over the renewal of its Tarkwa mining leases in Ghana. The company said it will not “just roll over” in negotiations with Ghana’s government over leases set to expire in April. Bloomberg previously reported that the government may consider transferring the leases to local parties, creating uncertainty over Gold Fields’ continued control of the mine.
• Illegal gold mining is surging in Peru as record prices fuel illicit activity. Illegal gold exports reached an estimated $11.5B in 2025, up 55% from the prior year and more than six times the level a decade ago. The expansion poses growing environmental, regulatory and supply-chain risks for Peru’s formal gold industry, according to Bloomberg.