Gold Price Hits More Than Two-Month High as Iran Talks and US Inflation Take Center Stage
Gold prices extended their rally on Tuesday, with the precious metal holding near its highest level in more than two months as renewed buying momentum outweighed pressure from a stronger US dollar, higher Treasury yields, and rising energy prices.
At 11:56 WIB, XAU/USD was up 0.4% at $4,407.79 per ounce, while Gold Futures gained 1.1% to $4,467.59. Meanwhile, XAG/USD fell 0.5% to $65.41 per ounce, while XPT/USD edged 0.2% higher to $1,761.10.
Gold Gains Momentum Ahead of US Inflation Data
The latest gold price rally follows a 2.4% surge on Friday after data showed that US nonfarm payrolls unexpectedly declined in July. Gold also closed Monday at around $4,390, gaining 1.11% and marking its highest daily close in nearly 10 weeks.
The strength of the gold market is particularly notable because the US dollar, Treasury yields, and energy prices have also moved higher — factors that would traditionally weigh on non-yielding gold.
Tony Sycamore, Senior Market Analyst at IG, said the resilience in gold prices reflects a combination of fear-of-missing-out (FOMO) buying from investors who missed the decline toward $4,000, short-covering among speculative traders, and renewed demand for safe-haven assets.
Market participants are now turning their attention to the US Consumer Price Index (CPI) report due Wednesday and the Producer Price Index (PPI) data scheduled for Thursday. The inflation reports could provide fresh clues about the Federal Reserve's interest-rate path and influence the next move in gold prices.
According to CME FedWatch, markets are currently pricing in a 52% probability of a Federal Reserve rate hike in September and an 81% probability of a rate hike in December.
Gold typically becomes less attractive when interest rates rise because the precious metal does not generate interest income. However, persistent geopolitical uncertainty, strong safe-haven demand, and shifting expectations for US monetary policy could continue to support gold prices in the near term.