By the end of August, the big correction in markets in late July/early August seemed a distant memory, with markets quickly regaining most of the ground lost in that sudden and very brief risk-off event. Most asset classes and markets ended August in positive territory, with the MSCI World index of developed market equities +2.6%, MSCI Emerging Markets +1.6%, and global government bonds +2.4%, all in USD terms. Returns were boosted by weakness in the US dollar, which fell by 2.1% against the euro and GBP, 2.6% versus the yen, and 2.7% on a trade weighted basis (taking its fall since the end of June to 4.7%, wiping out its earlier gains in 2024). Gold continued to perform well, benefitting from dollar weakness, protecting capital during the brief market sell-off, then participating fully in the subsequent recovery. Gold’s rise of 2.3% in August took its gain year-to-date to 21.3%, making it the best performing major asset class.
