Gold has recently surged above USD 3,500 per ounce, quickly advancing toward USD 3,600, propelled by investors grappling with the reality that governments may soon have no choice but to devalue currencies to manage overwhelming debt, according to Paul Wong, market strategist at Sprott Asset Management.
In a Friday interview with Kitco News, Wong explained that macro funds initiated this breakout by buying gold and selling long-term bonds, pushing its price beyond USD 3,500. He noted that gold had been consolidating in a bullish pattern for months—with no central bank selling and investment funds merely stepping aside rather than dumping positions—suggesting robust accumulation beneath the surface.
That kind of consolidation often precedes explosive moves, and analysts are now projecting an immediate target of around USD 3,900 per ounce following the current breakout.
Debt Dynamics and Rising Yields
Wong attributes the gold rally to mounting public debt across the U.S. and other OECD countries, fueling rising long-term yields and reduced confidence in governments’ fiscal discipline. Meanwhile, two- and ten-year inflation expectations are climbing, reflected in rising swap rates and break-even rates. The term premium—the additional yield investors demand for longer-duration bonds—also continues to rise.
Pushback from short-term yields remains limited, particularly as markets anticipate multiple rate cuts by the U.S. Federal Reserve before year-end—possibly even a more aggressive 50-basis-point cut—due to weakening labour-market data and warming signs of stagflation.
Transition to Fiscal Dominance
Wong warns that the U.S. is drifting toward “fiscal dominance”, where monetary policy becomes subordinate to fiscal imperatives. Stimulative fiscal measures like proposed tax cuts and expansive spending programs coupled with rate cuts would likely drive policymakers to devalue the dollar—a process that diminishes the value of monetary assets like Treasuries and the dollar itself, and propels gold upward.
Gold: The Ultimate Safe-Haven
Gold’s cross-asset appeal—from currencies and bonds to equities and geopolitical hedges—makes it uniquely positioned as a wealth preserver in times of systemic distrust. Amid declining faith in central banking and institutions, Wong argues that gold is not only a safe haven—it is a “safe asset.”
Current Spot Prices in Australia (as of early September 2025)
| Metal | Price (AUD per Troy Ounce) | Source |
|---|---|---|
| Gold | ~ A$ 5,443 – A$ 5,476 | goldprice.org (A$ 5,240.36 as of 26 Aug 2025), GoldRate24 (A$ 5,443.87), GoldPriceZ (A$ 5,475.95) Gold PriceGold Rate 24Gold Price Z |
| Silver | ~ A$ 62.55 | exchange-rates.org (A$ 62.551 per ounce) Exchange Rates |
Summary
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Gold is entering a strong upward trend driven by fiscal pressures, rising inflation expectations, and weakening confidence in monetary policy.
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Spot gold in Australia currently hovers between A$ 5,440 and A$ 5,480 per ounce, while spot silver is around A$ 62.50–62.55 per ounce.
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As governments increasingly lean on monetary devaluation to manage mounting debt, safe-haven demand for gold—and to a lesser extent silver—is intensifying.
