Gold Rises 0.39% on August 20 Amid Inflation and Geopolitical Uncertainty

Gold prices edged higher on August 20, 2025, with the precious metal trading at $3,342 per ounce as of 9:10 a.m. Eastern Time, a $13 increase from the previous day’s price of $3,329. This reflects a daily gain of 0.39% and marks a more than $830 increase from the $2,512 price level recorded one year ago [1]. Over the past month, however, gold has seen a slight decline, with the price of $3,342 representing a 1.65% increase compared to $3,397 per ounce on July 20, 2025 [1].

The one-year performance highlights the volatile nature of the gold market, with the price down 24.83% from a year ago. Despite this, gold remains a favored asset during periods of economic uncertainty and inflation. The ongoing inflationary pressures and geopolitical risks have driven demand for gold as a store of value, especially when compared to traditional stocks, which historically deliver higher returns in strong economic environments [1]. From 1971 to 2024, stocks averaged 10.7% annual returns, while gold averaged 7.9% [1].

The spot price of gold, which refers to the current market price for immediate transactions, is a critical metric for investors. Unlike futures contracts, which allow for deferred settlement, the spot price reflects real-time demand and is often used to gauge market sentiment. The difference between the spot price and the futures price—known as contango or backwardation—can also provide insights into market expectations for storage costs and supply dynamics [1]. A contango situation, where the futures price exceeds the spot price, is common for commodities like gold due to the costs associated with storing physical bullion.

Investors looking to participate in the gold market have several options. Exchange-traded funds (ETFs), gold bars, coins, and futures contracts are all popular avenues, each with its own advantages. For example, gold bars and bullion offer a tangible form of ownership, while gold ETFs provide liquidity and ease of trading. Gold IRAs are also gaining traction as a way to incorporate gold into retirement portfolios without the burden of physical storage [1]. Gold coins, while functionally similar to bullion, often carry a premium due to their collectible and historical value [1].

The broader precious metals market also showed activity on August 20, 2025. Silver was trading at $38 per ounce, while platinum and palladium were valued at $1,337 and $1,124 per ounce, respectively. Silver’s price is often more responsive to economic shifts due to its industrial applications, making it more volatile than gold [1]. Platinum and palladium, similarly, offer diversification but come with higher volatility risks.

A key consideration for investors is the price spread in gold trading, which is the difference between the bid (selling) and ask (buying) prices. A tighter spread indicates higher liquidity and stronger market demand [1]. For active traders, understanding these spreads is crucial for optimizing transaction costs and maximizing returns.

The question of whether now is a good time to invest in gold remains subjective, but the current economic climate supports the argument for diversification. With gold prices reaching record highs and showing resilience against inflationary trends, many experts suggest that adding gold to a portfolio can help reduce risk and stabilize returns during periods of market turbulence [1]. However, it is important to note that gold is not a guaranteed outperformer in all market conditions and should be considered as part of a broader investment strategy [1].

Source: [1] Current price of gold as of August 20, 2025 (https://fortune.com/article/current-price-of-gold-08-20-2025/)