Gold Trading Reminder: Gold Prices Continue to Rise, Hitting an Eight-Week High; Amid Inflation Uncertainty and Middle East Turmoil, Bulls Are Betting on the 4500 Mark

Huitong Net, August 11th —— Gold prices rose by 1.3% on Monday, approaching $4,390 per ounce, and hit a new high since June, reaching $4,395/oz during the session. The People's Bank of China increased its gold purchasing momentum in July, with strong technical momentum and “fear of missing out” sentiment driving buy orders. This week, the market's focus is on U.S. CPI and PPI data, with attention on the Federal Reserve's policy direction. At the same time, Iran and the United States are setting mutual conditions regarding the reopening of the Strait of Hormuz, and the sharp rise in oil prices has reinforced safe-haven and anti-inflation logic. Gold prices may fluctuate in the short term but still have upward potential in the medium term.

The global gold market climbed higher in volatile trading on Monday as spot gold prices rose 1.3% to stand above the $4,390 per ounce level, reaching as high as $4,395.11 and marking the highest point since June 5th. This rally broke through last Friday's seven-week high of $4,371.63, which came after unexpectedly weak U.S. non-farm payroll data, shifting market sentiment to cautiously optimistic. Bullish momentum intertwined with FOMO (fear of missing out) psychology continues to drive capital inflows, while this week's upcoming U.S. inflation data and the latest developments in Middle East geopolitics are becoming the key variables influencing short-term gold price directions.

In early Asian trading on Tuesday (August 11th), spot gold continued its rally. As of 06:55 (UTC+8), it had risen 0.26% to $4,400.74 per ounce, once again refreshing the high since June 5.

PBOC's Continued Accumulation and Technical Strength Resonating

The current surge in gold is not an isolated event. Official data released last week revealed that This move sends a clear signal: against the backdrop of increasing global uncertainty, gold continues to be actively allocated as a strategic reserve at the official level. Market strategists noted that overall technical momentum in gold is quite strong; traders are focused on the support from China's persistent buying while also worried about missing the opportunity for gold prices to return to the $4,500 threshold. This dual mindset of caution and unwillingness to miss out makes buying particularly firm near key resistance levels.

Data shows that in the second quarter of this year, global central banks’ net gold purchases reached 289 tonnes, up 62% year-on-year, hitting a record high for the same period. According to surveys from the World Gold Council, 45% of surveyed central banks plan to continue increasing gold reserves over the next 12 months, and 89% expect official global gold reserves to rise further.

Data updated by the People's Bank of China on August 7th showed that by the end of July 2026, China's gold reserves reached 76.08 million ounces (approximately 2,366.35 tonnes), an increase of 640,000 ounces compared to the end of June. This marks the 21st consecutive month of increasing gold holdings, with the scale of accumulation rising compared to June’s 480,000-ounce increase.

From a more macro perspective, gold, as a traditional safe-haven and anti-inflation asset, is being supported by multiple factors. The weakening labor market data has already tempered expectations for aggressive Fed rate hikes in the short term. CME FedWatch Tool shows traders are pricing in about a 50% chance for a rate hike in September, while the probability for December remains as high as 81%. This uncertainty provides a relatively friendly rate environment for gold. If this week’s inflation data further confirms price pressures are under control, the upside for the U.S. dollar and real interest rates may be limited, indirectly benefiting gold.

Inflation Data As Short-term Signal, Market Focused on CPI & PPI

Investors generally expect these data to provide critical clues for judging the Federal Reserve's subsequent policy path.

Surveys indicate the market expects July CPI to shift from June’s 0.4% decline to a 0.1% increase; the annual rate is expected to slip from 3.5% to 3.4%. Core CPI is expected to rise 0.1% month-on-month, with an annual increase of 2.5%.

Citigroup U.S. rates strategist Jason Williams noted that Citi economists expect another weak CPI report this month. However, he also warned: “A strong Consumer Price Index report can quickly change the market narrative and could subject U.S. Treasuries to significant sell-off pressure.”

KCM Trade Chief Market Analyst Tim Waterer expects that weak data will strengthen reasons to keep interest rates unchanged, and gold prices will find support above the $4,300 level in the short term.

If inflation data continues to weaken, the probability of a September rate hike by the Fed will fall further. The dollar index and U.S. Treasury yields could continue to decline, opening greater upside potential for gold. Conversely, if inflation data is surprisingly strong, renewed rate hike expectations may suppress gold prices in the short term.

Meanwhile, the interplay between the dollar and Treasuries also deserves attention. On Monday, the dollar index edged higher, partly driven by rising oil prices, while Treasury yields rebounded leading into the inflation data. The yield curve steepened, with short-term rates more sensitive to policy expectations. Analysts pointed out that downside risks facing U.S. Treasuries are asymmetric—a strong inflation report could quickly alter the market narrative and trigger significant selling pressure. This environment is two-sided for gold: volatility in interest rate expectations can amplify gold price swings, but the underlying factors of safe-haven demand and official buying still provide some cushion.

Hormuz Strait Impasse Boosts Oil Prices and Indirectly Strengthens Gold’s Safe-haven Appeal

The real complicating factor for market sentiment is the latest developments in the Middle East. Negotiations between Iran and Oman on delineating a new shipping route to reopen the Strait of Hormuz are nearing final agreement, but Tehran has made reopening this strategic waterway conditional on the U.S. providing compensation, lifting sanctions, and stopping military threats. U.S. President Trump, in turn, made reciprocal demands, calling for Iran to pay compensation for casualties in conflicts and protest incidents, extending responsibility more broadly across the region. Both sides laying out conditions has suddenly dimmed the prospects for a substantive agreement in the short term.

This impasse directly pushed oil prices higher. Brent crude and U.S. crude oil futures both surged over 6% on Monday—their largest one-day gains recently—partially clawing back losses that occurred as markets priced in reopening expectations for the strait. The Strait of Hormuz is responsible for about one-fifth of the world's oil and liquefied natural gas shipments; a prolonged closure or high-risk passage would inevitably raise energy costs and global inflationary pressures. Persistently high oil prices, in turn, reinforce market concerns about sticky inflation, indirectly supporting gold’s anti-inflation narrative.

Meanwhile, geopolitical uncertainty itself drives safe-haven flows into gold. Houthi attacks on Saudi refineries, U.S. strategic oil reserves dropping to 40-year lows, and supply disruptions in the Black Sea region all heighten energy market tension, further amplifying gold’s appeal as an “uncertainty hedge.”

However, investors should also be mindful of the impact that surging oil prices could have on Fed rate hike expectations; if expectations for Fed tightening heat up significantly again, it could once more pressure gold prices.

Gold Outlook Amid Bullish-Bearish Crosscurrents: Short-term Volatility, Medium-term Upside Remains

Overall, the PBOC's continued accumulation, strong technical momentum, and market anticipation of shifts in Fed policy provide a solid foundation for bulls, helping gold prices reach a two-month high; but on the other hand, this week’s uncertain inflation data and back-and-forth in Middle East negotiations could trigger short-term volatility. The sharp rebound in oil prices has reminded the market that geopolitical risks have not disappeared, and once inflation data proves unexpectedly strong, a repricing of rate expectations could pressure gold.

From a longer-term perspective, gold’s strategic value remains intact despite short-term volatility. Amid high global debt levels, frequent geopolitical conflicts, and the diversification of major central bank reserves, official and institutional demand for allocation continues to build. The $4,500 level is not an unattainable target, but the path to achieving it will most likely involve fluctuations and repeated tests. Investors need to closely watch this week’s CPI and PPI figures, as well as any substantive progress in the Hormuz Strait talks. The resonance between data and events will determine whether gold breaks above previous highs to continue climbing or consolidates at current levels.


(Spot gold daily chart, source: Easy Huitong)

At 06:58 (UTC+8), spot gold was quoted at $4,399.77 per ounce.