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WisdomTree
Gold Monthly
August 2025
Nitesh Shah
Head of Commodities and Macroeconomic Research, WisdomTree Europe
Nitesh Shah is a seasoned financial professional with over 24 years of experience in research and investment strategy. As Head of Commodities & Macroeconomic Research at WisdomTree Europe, he leads market analysis and insights across asset classes, with a focus on commodities and exchange-traded products. Previously, he held roles at Moody’s, HSBC Investment Bank, The Pension Protection Fund, and Decision Economics, building expertise in market analysis and strategy.
Nitesh earned a master’s degree in International Economics and Finance from Brandeis University and a bachelor's in Economics from the London School of Economics. His insights are frequently featured in financial media, and he is a sought-after speaker at industry events. He also hosts the ‘Commodity Exchange’ podcast, where he discusses trends shaping global markets. Passionate about guiding investors, Nitesh provides actionable insights to help them navigate complex financial landscapes.
Markets reassured, but gold finds support in policy and politics
Tariffs and market volatility
Tariff ambiguity haunted the gold market this past month. On Liberation Day (2 April 2025), bullion was explicitly excluded from reciprocal and sector tariffs. However, on 8 August 2025, the U.S. Customs and Border Protection website stated that 100oz and kilo gold bars from Switzerland would be subject to tariffs. These bars are the standard deliverables for New York–based Comex gold futures, whereas the global over-the-counter market, settled in London, trades in 400oz bars.
Swiss refineries play a critical role in linking the two markets by recasting 400oz bars into 100oz bars for U.S. delivery. This process has historically prevented significant price divergence between the two markets, except during extraordinary disruptions such as the COVID-19 pandemic, when grounded flights halted arbitrage.
Just before the Liberation Day tariff exemption was announced, traders priced tariffs into the U.S. market, widening the spread between Comex futures and London spot prices. The customs website posting reignited panic, pushing Comex futures to nearly a $40/oz premium over spot prices (Figure 1). However, President Trump later stated on social media that “Gold will not be tariffed,” calming markets and erasing the premium. While no further official clarification had been issued as of 18 August 2025, markets appear reassured.
Figure 1: Comex gold — spot gold price
Source: WisdomTree, Bloomberg. 01/01/2025-18/08/2025. Historical performance is not an indication of future performance, and any investments may go down in value.
Central bank purchases
According to the World Gold Council and Metals Focus Gold Demand Trends Q2 2025 report, central banks purchased 166.5 tonnes of gold in Q2 2025, a 33% decline from the previous quarter and 21% lower year-on-year (Figure 2a). On the surface, this suggests slowing demand. However, given the substantial increase in gold prices, central banks are likely spending more in nominal terms than in previous years.
We estimate that central banks spent more than $17.5 billion on gold in Q2 2025, the highest Q2 spending on record (Figure 2b). Q1 2025 spending of $22.9 billion also marked a record high for a first quarter.
The People’s Bank of China bought 2 tonnes of gold in July 2025, marking its ninth consecutive monthly addition. China’s official gold reserves now stand at 2,300 tonnes, about 6.8% of total foreign exchange reserves, after accumulating 21 tonnes year-to-date.
Figure 2a: Central bank gold purchases in tonnes
Figure 2b: Central bank gold purchases in dollar
Source: WisdomTree, World Gold Council. Q1 2010 – Q2 2025. Dollar values estimated using quarterly gold prices. Historical performance is not an indication of future performance, and any investments may go down in value.
Gold and real rates
We have frequently commented on the apparent decoupling of gold and real interest rates. That decoupling since 2022 is clearly visible when looking at data over a long time series (Figure 3a). However, using a shorter lens, specifically, since Liberation Day, the relationship appears less pronounced (Figure 3b). Most of the yield compression since mid-April 2025 has coincided with increases in gold prices, suggesting that the link is not fully broken.
Figure 3a: Gold and real interest rates, long time series
Source: WisdomTree, Bloomberg. January 1997-August 2025. Historical performance is not an indication of future performance, and any investments may go down in value.
Figure 3b: Gold and real interest rates, short time series
Source: WisdomTree, Bloomberg. 11 April 2025 – 18 August 2025. Historical performance is not an indication of future performance, and any investments may go down in value.
Geopolitical risks
Trump’s failed attempt to end the Russia–Ukraine war continues to support a geopolitical premium in gold. He hosted a summit with Putin in Alaska on 15 August 2025, but little progress emerged, aside from reports of Russian demands for land. A meeting between Zelensky and Trump in Washington went ahead on 18 August 2025, but we remain sceptical that Ukraine will consider territorial concessions without even a ceasefire in place.
As concerns grow that the terms of the ‘peace discussions’ are being driven by Russia, gold is likely to remain well supported.
Gold exchange-traded products
Gold held in exchange-traded products (ETPs) continued to rise, with 1.5 million troy ounces added between 17 July and 17 August 2025. World Gold Council data indicates $3.2 billion of inflows into gold ETPs in July, with all major regions (North America, Europe, and Asia) reporting gains.
However, China recorded outflows of $325 million in July. Earlier this year, China saw record inflows into gold ETPs, with H1 inflows exceeding the combined inflows of the previous five years. The recent outflow may reflect growing risk appetite among Chinese investors, as economic resilience and the limited impact of the trade war (so far) have encouraged less bearish positioning. Notably, inflows into Japanese and Indian gold ETPs outweighed the Chinese outflows.
U.S. monetary policy and political risks
Gold remains well supported by expectations of a Federal Reserve interest rate cut in September. By 13 August 2025, Fed Funds Futures had priced in a 100% probability of a September cut, following weak labour market data released on 1 August 2025 (Figure 4). Although stronger-than-expected Producer Price Inflation data on 14 August reduced that probability slightly, markets remain convinced a cut is imminent.
More controversially, Trump reacted to the weak labour data, particularly the large downward revisions, by dismissing the head of the Bureau of Labor Statistics and nominating E.J. Antoni, chief economist at the Heritage Foundation, to the role. The move drew sharp criticism amid fears of political interference in statistical reporting, echoing broader concerns about the administration’s influence over the Federal Reserve.
This political backdrop could further support gold, given its reputation as an anti-establishment asset: a pseudo-currency immune to the debasement risks of fiat money.
Figure 4: Fed Fund Futures pricing of rate cuts in September 2025
Source: WisdomTree, Bloomberg. 01 July 2025 - 18 August 2025. Historical performance is not an indication of future performance, and any investments may go down in value.