Gold Holds Above $4,400 Ahead of U.S. CPI
Gold extended its gains on Wednesday and remained above the psychological $4,400-an-ounce level. XAU/USD traded around $4,405.14, up about 0.85%, while gold futures hovered near $4,464.55. The move kept bullion close to its highest level in more than two months.
Investors are now focused on the U.S. Consumer Price Index report due later today. July CPI is expected to rise around 0.1% month-on-month after falling 0.4% in June, while annual inflation is projected to ease to 3.4% from 3.5%. The data could provide an important signal for expectations surrounding the Federal Reserve’s September policy decision.
Developments around the Strait of Hormuz are also supporting demand for gold as a safe-haven asset. Optimism briefly improved after Pakistan’s defense minister said the U.S. and Iran were moving closer to some form of agreement, while Iran-Oman talks were also reported to be at an advanced stage. However, Tehran has maintained that Hormuz will not fully reopen until Washington meets several of its demands.
The uncertainty has kept energy prices elevated. Brent remained near $89 a barrel, while WTI stayed above $83. Higher oil prices remain a risk for gold because prolonged energy inflation could keep overall price pressures elevated and encourage the Federal Reserve to maintain tighter monetary policy.
Gold is also receiving support from demand in China. The People’s Bank of China increased its gold reserves again in July, while Chinese gold-backed ETFs continued to attract inflows. This suggests that institutional and investment demand remains an important source of support for bullion.(mrv)
Source : Newsmaker.id
