Deep Analysis of the Precious Metals Market in August 2026: Multiple Drivers Push Gold and Silver to New Highs, How Investors Can Seize Opportunities

Market Overview: Gold and Silver Hit New Highs, Thai Domestic Gold Prices Supported by Exchange Rate

August 2026 saw a strong upward trend in the global precious metals market. As of August 25, London gold closed at $2,615 per ounce, up 3.2% from the same period last month, hitting a new high; London silver closed at $45.8 per ounce, with a weekly gain of 9.5%, breaking the $45 mark and reaching a new high in nearly six years. In the Thai market, affected by the depreciation of the Thai baht, domestic gold prices strengthened in sync, with Bangkok gold shops' 999 pure gold price reaching 43,500 THB/gram, up 1.8% from the same period last month, hitting a new high for the year.

Behind this upward trend, multiple driving factors are intertwined. On one hand, global central banks continue to purchase gold, with Asian central banks becoming the main force, driving stable growth in gold demand; on the other hand, the hedging sentiment triggered by rising geopolitical risks and weak economic data has led to capital flowing into the precious metals market. In addition, the industrial demand brought by the rapid development of AI technology, especially the application of silver in fields such as heat dissipation materials and electronic components, has become the core driver of silver's leading gains.

II. Analysis of Core Driving Factors

1. Central Bank Gold Purchases: Asian Central Banks as the Main Force, Strong Foundation for Gold Bull Market

According to the latest Q2 report released by the World Gold Council (WGC), global central bank gold purchases in the first half of 2026 reached 456 tons, a 12% increase from the same period in 2025, hitting a new high for the same period in history. Among them, Asian central banks contributed more than 60% of the gold purchases, with central banks of countries including China, India, and Thailand increasing their gold reserve allocations. Analysts point out that the main motivation for Asian central banks to purchase gold is to diversify foreign exchange reserve risks and cope with dollar fluctuations and geopolitical uncertainties.

The Bank of Thailand purchased 28 tons of gold in the first half of 2026, a 15% increase from the same period in 2025, becoming an important force in Asian central bank gold purchases. The Governor of the Bank of Thailand stated at a recent press conference that gold, as a traditional hedging asset, can effectively hedge against THB exchange rate fluctuations and global economic risks, so it will continue to maintain stable growth in gold reserves.

2. Hedging Demand: Driven by Both Geopolitical Risks and Weak Economic Data

In August 2026, geopolitical risks in the Middle East escalated, especially the intensification of conflicts between Iran and Saudi Arabia, triggering market concerns about energy supply disruptions and pushing hedging funds into the gold market. In addition, the U.S. July non-farm payrolls data showed that new jobs were only 180,000, far below the market expectation of 250,000, and the unemployment rate rose to 3.9%, exacerbating market expectations of an economic recession, which weakened the dollar and further supported gold prices.

In the Thai market, the THB/USD exchange rate fell to 36.5 THB per USD in August, hitting a new low in a year, which made Thai domestic gold prices more attractive relative to international prices. Many Thai investors regard gold as a tool to hedge against exchange rate risks, leading to a significant increase in gold shop sales, especially the sales of 999 pure gold jewelry, which increased by 20% from the same period last month.

3. Industrial Demand: AI Technology Drives Surge in Silver Demand

The strong rise in silver prices mainly comes from the surge in industrial demand. With the rapid development of AI technology, the demand for heat dissipation materials from data centers and high-performance computing equipment has increased significantly, and silver, due to its excellent thermal conductivity and electrical conductivity, has become a core material for heat dissipation modules. According to industry statistics, the demand for silver from global AI data centers in 2026 increased by 30% compared to 2025, and is expected to maintain an annual growth rate of over 20% in the next three years.

In addition, the application of silver in fields such as solar cells and electronic components is also expanding. For example, the demand for silver paste in solar cells has increased due to the growth in global renewable energy installations, with the demand for silver from solar cells in the first half of 2026 increasing by 18% compared to the same period in 2025. The growth of these industrial demands has widened the supply-demand gap for silver, pushing up prices.

4. Exchange Rate Impact: Baht Depreciation Supports Domestic Gold Prices

The continuous depreciation of the Thai baht is an important factor in the strengthening of domestic gold prices in Thailand. In August 2026, the THB/USD exchange rate fell by about 2.5%, hitting a new low in nearly a year. Since gold is priced in U.S. dollars, the depreciation of the baht makes Thai domestic gold prices more competitive relative to international prices. For example, when the international gold price is $2,615 per ounce, calculated at the current exchange rate, the domestic gold price in Thailand is about 43,500 THB/gram, while if the baht exchange rate remains stable, the domestic gold price may only be around 42,000 THB/gram. Therefore, the depreciation of the baht directly pushes up the purchase cost of domestic gold in Thailand and also stimulates investors' demand to buy.

III. Technical Analysis: Strong Trends for Gold and Silver, Likely to Continue Rising in the Short Term

From a technical perspective, gold prices have broken through the $2,600 mark and stabilized above $2,500. The short-term moving averages (5-day, 10-day, 20-day) show a bullish arrangement, the RSI indicator has reached 75, which is in the overbought zone, but the strong buying support in the market continues to push prices higher. The MACD indicator shows that gold prices are in an upward channel, with the red histogram continuously expanding, indicating strong bullish momentum.

Silver prices have broken through the $45 mark, and the short-term moving averages (5-day, 10-day, 20-day) have all crossed above the long-term moving averages, forming a golden cross. The RSI indicator has reached 80, which is in the overbought zone, but the support from industrial demand makes it difficult for silver prices to fall significantly. The MACD indicator shows that silver prices are in a strong upward trend, with the red histogram continuing to grow, indicating that bullish momentum is still accumulating.

It should be noted that the strengthening of the U.S. dollar index may put pressure on gold and silver prices. If U.S. economic data is better than expected, a stronger dollar may lead to a short-term adjustment in gold and silver prices, but in the long run, hedging demand and industrial demand will still support the strong trend of gold and silver prices.

IV. Investment Strategy Recommendations

1. Diversified Investment: Equal Weighting of Gold and Silver

Since gold and silver have different driving factors, investors should adopt a diversified investment strategy. Gold is mainly driven by hedging demand and central bank purchases, while silver is driven by industrial demand, with low correlation between the two, so diversified investment can reduce risks. It is recommended that investors maintain a gold-to-silver allocation ratio of around 7:3 to balance risk and return.

2. Focus on ETFs: High Liquidity, Easy to Operate

For ordinary investors, gold ETFs and silver ETFs are good investment tools. Gold ETFs such as SPDR Gold Shares (GLD) and iShares Gold Trust (IAU), and silver ETFs such as iShares Silver Trust (SLV) and ETFS Physical Silver (PHAG), have high liquidity and convenient trading, suitable for short-term swing operations. In addition, Thailand's local gold ETFs such as Thai Gold ETF (TGLD) are also worth attention, as their prices are linked to domestic gold prices and are suitable for Thai investors.

3. Pay Attention to Risk Control: Set Stop-Loss Levels

Due to the high volatility of gold and silver prices, investors should set reasonable stop-loss levels to avoid losses caused by significant price pullbacks. For example, for gold investment, the stop-loss level can be set below $2,500 per ounce, and for silver investment, the stop-loss level can be set below $43 per ounce. In addition, investors should avoid excessive leverage operations and control their positions within 20% of total funds to reduce risks.

4. Pay Attention to Exchange Rate Changes: Thai Investors Need to Watch Baht Fluctuations

For Thai investors, fluctuations in the baht exchange rate will affect domestic gold prices. If the baht continues to depreciate, domestic gold prices may continue to rise, but it also increases investment costs. Therefore, investors should pay attention to the trend of the baht exchange rate and adjust their investment strategies in a timely manner. For example, when the baht depreciates, investors can appropriately increase their gold allocation to hedge against exchange rate risks; when the baht appreciates, they can reduce their gold allocation and turn to other assets.

V. Conclusion

In August 2026, the precious metals market showed a strong upward trend under the influence of multiple driving factors. Gold prices broke through $2,600 to hit a new high, while silver led gains due to AI industrial demand, breaking the $45 mark. In the future, as global central banks continue to purchase gold, geopolitical risks rise, and industrial demand grows with AI technology, the precious metals market is expected to continue to strengthen. Investors should adopt a diversified investment strategy, focus on ETF products, and pay attention to risk control to seize market opportunities.