Gold Nears 10-Week High

Gold extended gains above $4,420 an ounce on Wednesday, approaching a 10-week high as investors weighed US inflation data, Federal Reserve policy expectations and developments surrounding the Strait of Hormuz.

US consumer prices rose broadly in line with forecasts in July, easing concerns over an imminent Fed rate hike.

Following last week’s weak jobs report, the softer inflation picture encouraged investors to reduce expectations for a September increase, supporting demand for gold.

Geopolitical uncertainty also remained a key driver, with Pakistan’s defense minister saying the US and Iran were “close to some sort of arrangement” to reopen Hormuz, while President Donald Trump claimed the US had “total control” of the waterway.

Meanwhile, central-bank buying continued to underpin gold demand.

China’s central bank added around 20 tonnes to its reserves in July, marking its 21st consecutive month of purchases.

Global central banks bought an estimated 289 tonnes in the second quarter.