Gold Holds Above $4,000 as Investors Weigh Inflation and Rate Outlook
Gold Holds Above $4,000 as Investors Weigh Inflation and Rate Outlook
Gold prices remained elevated Thursday, trading above $4,000 an ounce as investors assessed fresh U.S. inflation data and the outlook for interest rates.
Spot gold rose about 0.2% to $4,165.29 an ounce, while U.S. gold futures gained 0.4% to $4,202.30. The move came despite a sharp pullback in September, when gold prices fell roughly 6%.
The latest gains followed data showing U.S. inflation was softer than expected in August. That reduced market expectations for another Federal Reserve rate increase in October, a development that can support gold because lower expected interest rates reduce the relative appeal of interest-bearing assets.
Gold's rise has been particularly striking over the summer. The World Gold Council reported that gold gained 13% in August, its third-strongest monthly performance in 25 years, ending the month at about $4,563 an ounce. Strong investment flows, including purchases of gold-backed exchange-traded funds, helped fuel the rally.
ETF demand has remained a notable part of the story. Global gold-backed ETFs added about $18 billion in August, lifting total assets under management 16% from the previous month to $615 billion. Holdings climbed to a record 4,189 tonnes, according to the World Gold Council.
Central-bank buying has also contributed to demand. China's central bank reported purchasing 20 tonnes of gold in August, its largest monthly purchase since October 2023.
Still, gold's path has not been one-way. Higher Treasury yields, a stronger U.S. dollar and expectations for tighter monetary policy pressured the metal in September. On Sept. 28, spot gold fell about 4% in a single session to a seven-week low as surging oil prices fueled renewed inflation concerns.
Analysts and investors are now watching U.S. employment and inflation data for clues about the Federal Reserve's next moves. For gold, the competing forces of interest rates, currency movements, geopolitical uncertainty and continued central-bank demand are likely to remain central to price movements in the months ahead.