Gold drifts near seven-week high on buying momentum as inflation data looms
GLD•Gold holds near seven-week peak as traders await inflation data
Gold edged higher on Monday to hover near a seven-week peak hit in the previous session as bullish momentum and fear of missing out propelled prices forward, while investors awaited key U.S. inflation data to gauge the Federal Reserve's policy moves.
Spot gold rose 0.4% to $4,356.79 per ounce by 1:15 p.m. EDT (1715 GMT). It hit its highest level since June 17 at $4,371.63/oz on Friday after data showed an unexpected drop in U.S. nonfarm payrolls.
U.S. gold futures added 0.4% to $4,416.00.
"The technical momentum right now is pretty strong for gold overall," said Bob Haberkorn, senior market strategist at StoneX.
"It's cautious trading, with China buying, and the July CPI and PPI report this week, and kind of a fear of missing out on a move back over 4,500 for the time being."
China's central bank stepped up gold purchases in July, adding the most bullion to its reserves since October 2023, official data showed last week.
Investors await the U.S. consumer price data due on Wednesday and producer price data on Thursday.
Economists polled by Reuters expect the July CPI to have risen 3.4% year-on-year, versus 3.5% in June.
"The CPI data is going to be important. Inflation is starting to cool a little bit, with markets expecting a report that's not going to be hot on inflation, and will lead to gold trading sideways to higher in the near term," said Jim Wyckoff, a market analyst at American Gold Exchange.
Traders are pricing in a 50% chance of a rate hike in September and an 81% chance in December, according to the CME FedWatch Tool.
Bullion is generally less attractive in a high-interest-rate environment because of its non-yielding characteristic.
Meanwhile, Iran said it was nearing a final pact with Oman defining new shipping lanes between them through the Strait of Hormuz, but repeated that the U.S. must meet other conditions before the strategic waterway is reopened.
