August 2025 - Precious Metal Market News

Gold’s Tug of War In August

August was a month of volatility for gold, marked by a sharp decline followed by a recovery. The price began at £2,528 per ounce, falling to a monthly low of £2,457 on August 18th. This drop was largely influenced by discouraging U.S. economic data, particularly the Producer Price Index (PPI), which surged 0.9% in July, far exceeding expectations. Within hours of the announcement, gold futures fell by $30, reaching an intraday low of $3,375.50, before stabilising at $3,382.30.

Figure 1 – Price of Gold (£) in July

However, gold rebounded toward the end of the month, closing around £2,557 per ounce. A key turning point came on August 22nd, when Federal Reserve Chair Jerome Powell spoke at the Jackson Hole symposium. Powell signaled a more cautious approach to monetary policy, highlighting risks in the labor market. Supporting this, July’s payroll data showed only 73,000 jobs added, missing the forecast of 100,000, while 250,000 jobs were revised down from May and June, pushing the unemployment rate up to 4.2%.

These developments have led investors to speculate on a potential interest rate cut in September, which could further support gold prices in the near term. Additional pressure from U.S. President Donald Trump to lower interest rates may also play a role. Notably, the President of the European Central Bank warned that Trump's undermining comments directed at the Federal Reserve could pose a risk to global economic stability.

Silver Stuns With Record UK Prices

UK silver investors were thrilled as prices reached a new all-time high, surpassing the previous record of £29.29 to close August at £29.52. This fresh fourteen-year high places silver among the top-performing assets of the year, with an impressive gain of roughly 30%. In US dollars, silver came within a whisker of hitting $40 per ounce, ending the month at $39.79. However, this remains well below the all-time high of $49.45, set on 18 January 1980, over 45 years ago!

Figure 2 – Price of Silver (£) in July

Why Did Silver Hit a Record High?

The price of silver has been propelled to new heights by a potent combination of persistent global inflation concerns and aggressive monetary easing by major central banks. A key contributing factor is the decline of the US dollar, which has made dollar-denominated commodities like silver more attractive. As the dollar weakens, the value of these metals tends to rise, enhancing their appeal. So far this year, silver has increased by 40% in US dollars, outperforming gold, the S&P 500, Bitcoin, and many stocks and shares.

Looking Ahead

It’s fair to say that silver is currently in a bullish phase, with many analysts forecasting a significant long-term breakout. In the short term, several leading firms and market experts expect silver to end the year between $40 and $50, while some more optimistic forecasts suggest it could reach as high as $70 to $80. Although such projections may seem ambitious, they could become a reality over the longer term. This outlook is supported by ongoing supply constraints, rising investment demand, and a range of geopolitical factors that continue to influence the market.