Gold · Daily Analysis
Gold Extends Rally to Nine-Week High as China Boosts Reserves
Executive Summary
At the close of trading, the price of gold rose by $31 (+0.71%), increasing from $4,345 to $4,376 per troy ounce. During the trading session, gold reached a nine-week high of $4,377 per troy ounce.
Fundamental Analysis
Gold extended its rally as strong buying momentum continued following Friday's unexpectedly weak U.S. jobs report. The weaker labor market reduced expectations for another Federal Reserve rate hike, supporting demand for gold and keeping the metal near its recent highs.
Market attention has now shifted toward the upcoming U.S. inflation data. Investors are waiting for the July Consumer Price Index and Producer Price Index reports for further evidence about the direction of inflation and the Federal Reserve's next policy decision. Expectations for softer inflation have helped maintain positive sentiment toward gold, as lower inflation pressure could reduce the need for further rate increases.
China also provided additional support for the gold market. The country's central bank increased its gold purchases in July, recording its largest monthly addition to reserves since October 2023. Continued central-bank buying added to demand for the metal.
Geopolitical developments remained relevant but were not the main driver of the day's move. Iran said that reopening the Strait of Hormuz would depend on U.S. concessions on several demands, keeping uncertainty around the strategically important shipping route. Any disruption to oil flows could increase energy prices and create renewed inflation concerns.
Key Levels
| Session High | $4,377 |
| Session Close | $4,376 |
| Prior Close (Support) | $4,345 |
Outlook
Overall, strong buying momentum following the weak U.S. jobs report remained the main driver of gold's advance. Lower expectations for Federal Reserve rate hikes, continued central-bank purchases and expectations for softer inflation supported the upward move. Geopolitical uncertainty around the Strait of Hormuz remained an additional factor, but the market's primary focus was on U.S. monetary policy and the upcoming inflation data.
Current price: Gold — $4,376 per troy ounce
What to Watch Next
- The July Consumer Price Index and Producer Price Index reports, due soon — these are the next major data points markets are watching to confirm or contradict the softer inflation narrative currently supporting gold.
- Further details on China's central bank gold purchases, and whether other central banks follow with similarly large additions.
- Any developments on U.S. concessions that could affect Iran's stance on reopening the Strait of Hormuz.
Bottom Line
This session extended a trend rather than starting a new one — last Friday's weak jobs data is still doing the heavy lifting, now reinforced by real structural demand from China's record monthly purchase. With CPI and PPI data on deck, that combination of rate-cut momentum and central bank buying looks durable heading into next week, but the inflation data is the next real test.
This article is provided for informational purposes only and does not constitute investment, financial, or trading advice.