Gold Surges to Two-Month High on Chinese Demand and Central Bank Reserves
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 precious metal has been gaining popularity as a defensive asset amid heightened market volatility, even with rising inflation risks and expectations of higher interest rates.
China's gold-backed exchange-traded funds (ETFs) have seen their longest run of inflows in months, while the People's Bank of China has increased its gold reserves by around 20 tonnes in July, following a 15-tonne addition in June - the largest monthly increase since October 2023.
However, uncertainty persists over a potential US-Iran agreement that could end the conflict and reopen the Strait of Hormuz, while investors await key US inflation data this week, which may shift expectations for future Federal Reserve policy.