Gold Soars to Two-Month High on Strong Chinese Demand

Gold prices surged to a two-month high on Tuesday, reaching $4,390 an ounce, as demand from China strengthened despite rising inflation risks and expectations of higher interest rates. The metal has been gaining traction in recent weeks due to its status as a hedge against volatility in other asset classes.

Chinese institutional investors continued to increase their bullion holdings, while gold-backed ETFs in China recorded their longest streak of inflows in several months. China's central bank also accelerated its gold purchases, adding around 20 tonnes to its reserves in July after an increase of approximately 15 tonnes in June, the largest monthly addition since October 2023.

Meanwhile, crude oil prices held above $82 per barrel on Tuesday, supported by persistent uncertainty over a potential U.S.-Iran agreement to end the conflict and reopen the Strait of Hormuz. Geopolitical risks remained elevated after U.S. President Donald Trump rejected Iran's conditions for a peace deal and demanded compensation for people killed in wars, attacks, and protests.