Spot gold rose 0.5% to $4,410.92 an ounce, extending a 3.6% gain over the previous two sessions.
July inflation data could shape expectations for the Federal Reserve’s next interest-rate move, with softer price growth potentially supporting rate-cut bets.
Fresh US demands on Iran have raised uncertainty over the Strait of Hormuz, adding to gold’s appeal despite bullion remaining below its pre-conflict level.
Gold Jumps 3.6% In Two Days: What’s Driving The Fresh Bullion Rally?
Gold climbed to a two-month high as investors weighed US inflation data, Federal Reserve rate expectations and renewed tensions around Iran and the Strait of Hormuz
Summary
Advertisement
Spot gold rose 0.5 per cent to $4,410.92 an ounce at 8:38 a.m. on Tuesday, touching a two-month high as investors weighed US inflation data, interest-rate expectations and renewed geopolitical tensions, Bloomberg reported.
The precious metal has gained 3.6 per cent over the past two sessions and moved above its 100-day moving average on Monday.
Gold has also climbed decisively above the $4,000-per-ounce level in recent weeks, supported by sustained central-bank purchases and increased inflows into Chinese gold-backed exchange-traded funds.
US Inflation Data In Focus
Markets are now turning their attention to the US Consumer Price Index, due on Wednesday. Economists surveyed by Bloomberg expect consumer prices to rise 0.1 per cent in July, following a 0.4 per cent decline in June.
The latest inflation reading comes after a weak US jobs report last Friday intensified expectations around the Federal Reserve's interest-rate path. Investors are watching for signs that easing price pressures could give policymakers greater room to lower borrowing costs.
Advertisement
Cleveland Fed President Beth Hammack, however, has indicated that the central bank may need to raise interest rates more than once to bring inflation back to its 2 per cent target.
Hammack was among three policymakers who dissented from the Fed's decision last month to keep rates unchanged.
Meanwhile, US President Donald Trump sought to play down reports about his communications with Fed Chairman Kevin Warsh.
Trump said he had spoken with Warsh only once, and described the conversation as brief, since Warsh took office in May.
Iran Tensions Add To Gold's Appeal
Geopolitical risks are also supporting demand for bullion. Trump issued fresh demands to Iran on Monday, potentially reducing the prospects of an agreement that could reopen the Strait of Hormuz and bring an end to the months-long conflict.
Gold is traditionally viewed as a safe-haven asset during periods of geopolitical and economic uncertainty.
However, despite its recent gains, bullion remains around 17 per cent below its level before the Iran conflict began in late February.
Advertisement
Other precious metals also advanced. Silver rose 0.4 per cent to $65.98 an ounce, while platinum and palladium traded higher.
The Bloomberg Dollar Spot Index edged lower after gaining 0.2 per cent in the previous session.
Investors will now closely watch the US inflation data for clues on the Federal Reserve's next move, with any signs of cooling price pressures potentially strengthening expectations for rate cuts and providing further support to gold.