Gold Hits Two-Month High Amid Slowing US Economy and Geopolitical Uncertainty
Gold has reached a two-month high, trading at around $4,400 an ounce. Despite a stronger US dollar and higher Treasury yields, which normally weigh on gold prices, the metal has managed to rally due to weaker US employment data, renewed safe-haven demand, and continued Chinese central-bank buying.
The latest advance is unusual given the combination of headwinds that gold usually faces. However, investors are placing greater weight on the possibility of a slowing US economy, continued geopolitical uncertainty, and the risk of missing a renewed move higher after gold's pullback towards $4,000 in June.
A softer reading in US inflation data could strengthen the case for gold to break through the $4,460 to $4,500 resistance zone. On the other hand, a higher reading, especially if oil remains elevated, could revive concerns that interest rates will stay higher for longer.