Gold Prices Surge to Two-Month High on Chinese Demand

Gold prices have surged to a two-month high of $4,400 per ounce on Tuesday, driven by robust demand from Chinese institutional investors and the People's Bank of China's continued reserve accumulation.

The Chinese gold-backed ETFs are recording their longest run of inflows in months, with Chinese investors building positions in gold as a defensive asset amid heightened volatility in other markets.

The People's Bank of China has been increasing its gold reserves, adding around 20 tonnes in July and 15 tonnes in June, the largest monthly addition since October 2023.

Despite rising inflation risks and expectations of higher interest rates driven by elevated oil prices, gold's appeal as a defensive asset has strengthened amid market volatility.