Gold's Momentum Slows Ahead of Crucial Inflation Report

Gold's weekly performance improved by more than 7% since January's numbers. However, on Monday morning, it was down about 0.3%. The metal's surge last week was influenced by a negative July jobs report, which reduced the likelihood of a September Federal Reserve rate hike.

The Bureau of Labor Statistics reported -23,000 nonfarm payrolls in July, beating the consensus estimate of +80,000. This led to a decrease in the probability of a September rate hike from 55% to approximately 40%, according to CME FedWatch data.

The upcoming Consumer Price Index (CPI) report on Wednesday is expected to confirm whether the Federal Reserve can hold rates steady or revive fears of another hike before year-end. A Reuters consensus poll forecasts headline CPI at 3.4% year-over-year, down from 3.5% in June, and core CPI easing to 2.5% from 2.6%.

Iran's refusal to negotiate over the Strait of Hormuz has caused Brent crude to rise approximately 1.4% to $84.70 a barrel by early Monday morning, according to Reuters. This increase could lead to higher energy prices in August and complicate the inflation picture for the Federal Reserve.

The World Gold Council reported that central banks purchased a net 288.9 tonnes of gold in the second quarter of 2026, a quarterly record and 62% higher than the same period a year ago. This sustained buying by central banks reflects their long-running shift towards managing reserve assets in response to structural concerns.