Precious metals have become one of the standout trades of the month, clawing back losses suffered earlier in the year, silver even more sharply than gold.
Gold touched an all-time high of $5,598 an ounce on 28 January, before a sharp pullback during the year dragged it down to around $3,942 by end of June, a decline of roughly 30% from its peak.
Since that low, the metal has rebounded with the bulk of the move happening in August, and is trading around $4,466 at the time of writing. As it stands, gold is up 11% this month and 3.6% year-to-date.
Silver's rally has been even more dramatic.
The metal hit an all-time high of $121.65 an ounce on 29 January, before tumbling to around $54.7 by mid-July, a slide of roughly 55% from its peak.
It has since climbed by around 20% with most of the move occurring in August, and is trading at around $66 at the time of writing. As it stands, silver is up 16.5% this month but is still down over 7% year-to-date.
The latest leg higher in precious metals gathered pace this week after the US Treasury doubled the size of its buybacks of 10 to 30-year debt to at least $4 billion (€3.4bn) per operation from 9 September, aiming to calm a jittery bond market.
The announcement landed hours before separate figures confirmed the US national debt had topped $40 trillion (€34.4tn) for the first time, roughly two years ahead of the US Congressional Budget Office projections.
The 30-year Treasury yield had climbed to its highest level since 2007 before easing on the buyback news, and the dollar fell sharply in response, reviving talk of the so-called dollar debasement trade, the theory that a growing debt pile erodes confidence in a currency over time.
Weak US jobs and retail sales data, alongside soft inflation figures, also prompted traders to pare back the odds of a September rate hike, with CME FedWatch data showing that probability falling from above half to roughly one in three.
Lower yields make non-yielding gold and silver more attractive, while central banks and exchange-traded funds have kept adding to their positions, according to data from the World Gold Council.
