Gold tops $4,400 for first time in two months ahead of key US inflation data

Gold advanced past $4,400 an ounce on Tuesday to reach a two-month high, rising for a third consecutive session as traders positioned ahead of key US inflation data that could shape the Federal Reserve's next move on interest rates.

Spot gold was up 0.5% at $4,411.77 per ounce, its highest level since early June, while US gold futures rose 1.2% to $4,472.10, according to Reuters. Bloomberg reported bullion rose as much as 0.7% on Tuesday after adding 3.6% over the previous two sessions, with technical buying spurred by the metal's ascent through the 100-day moving average.bloomberg+1

Weak Jobs Data Shifts Rate Expectations

The rally follows gold's strongest weekly gain since January — more than 7% — fueled by a July payrolls report that showed the US economy unexpectedly shed 23,000 jobs. Prior months' job gains were also revised sharply lower, prompting futures markets to flip the odds of a September Fed rate hike from likelier-than-not to a worse-than-even chance.cnbc+1

At its July meeting, the Federal Reserve kept rates steady, with three officials dissenting in favor of a hike. The implied probability of a September rate increase fell to 44% from 57% a week earlier before rebounding to 51.7% on Monday as rising oil prices revived inflation concerns.kitco+2

"Gold is edging slightly lower as it succumbs to some profit-taking following last week's strong NFP-inspired gains," said Tim Waterer, chief market analyst at KCM Trade, in comments reported by CNBC on Monday. "I expect gold to remain supported above the $4,300 level in the near term."cnbc

Inflation Data and Geopolitical Risks in Focus

The US Consumer Price Index is due Wednesday, with consensus at 3.4% year-over-year, followed by Producer Price Index data Thursday. Softer readings would strengthen the case for a rate hold and clear a path for further gold upside, while a hotter print could revive hike expectations.cruxinvestor+1

Geopolitical tensions are adding another layer of support. Iran said it was nearing a shipping-lane agreement with Oman through the Strait of Hormuz but repeated that the US must meet several conditions before the strategic waterway is reopened. President Trump responded with demands that Iran pay compensation, in a rhetorical escalation that complicated reopening efforts and pushed oil prices higher. Nymex WTI crude traded near $79 while Brent was near $85 a barrel on Monday.cnbc+2

Central bank demand has also underpinned gold, with official-sector purchases surging to a record 289 tonnes in the second quarter, up 74% year-over-year. J.P. Morgan targets $6,000 per ounce for year-end 2026 if central bank buying averages 225 tonnes per quarter and Fed rate expectations remain contained.cruxinvestor