Gold Closes Higher; CPI Looms as Next Test
Gold prices ended trading on Monday, August 10, 2026, with gains, remaining near seven-week highs. Data from Trading Economics shows gold hovering around US$4,389 per troy ounce at the close, up approximately 1% from the previous session. Gold's strength extended the momentum generated after last week's US employment report raised market doubts regarding the Federal Reserve's need to hike interest rates again in the near term.
Demand for gold was also bolstered by strong buying momentum and growing investor interest in safe-haven assets. Reuters noted that spot gold traded at US$4,356.79 per troy ounce on Monday, having previously touched a seven-week high. Gold purchases by China's central bank provided further support, as the country's gold reserves recorded their largest increase since October 2023.
However, gold's gains faced headwinds from a strengthening US dollar and rising bond yields. The dollar index rose about 0.2% to 99.80, while a surge in oil prices reignited concerns about inflationary pressure. Brent crude jumped more than 4% toward US$87 per barrel due to uncertainty surrounding the reopening of the Strait of Hormuz, prompting the market to reconsider the risk that energy-driven inflation could limit the Fed's room to adopt a more dovish stance.
Investor attention is now focused on the US CPI report scheduled for Wednesday. This data will serve as a major test for the gold rally, as it will influence expectations regarding the Fed's next interest rate move. Softer inflation could weigh on the dollar and yields while opening the door for gold to retest the US$4,400 level; conversely, a hotter-than-expected CPI could trigger a repricing of interest rate expectations and spark profit-taking following gold's strong rally in recent sessions. (CP)
