Gold rally accelerates as investors seek safe haven amid US inflation data uncertainty

Gold prices continued their upward momentum for a third consecutive session, buoyed by a softer dollar and lower Treasury yields, as investors brace for key US inflation data and assess geopolitical risks.

Gold extended its rally for a third straight session on Tuesday as a softer dollar and lower Treasury yields kept investors leaning toward the metal as a safe haven. According to CNBC, the December gold futures contract on COMEX settled at $4,484.30 an ounce, up $64.60, or 1.46%, after traders positioned for Wednesday’s July consumer price index report.

Spot gold moved differently from futures, slipping 0.3% to $4,376.31 an ounce after touching $4,434.84 during the session, its highest level since June 5. The split reflected a market that remained eager to hedge against inflation and geopolitical risk but was still cautious about chasing prices higher before the inflation data.

Peter Grant, senior metals strategist at Zaner Metals, told CNBC that investors want confirmation that inflation remains under control and said a softer year-over-year CPI reading would continue to support gold. Ole Hansen, head of commodity strategy at Saxo Bank, said the market is showing signs of improvement, pointing to steady central bank demand, a friendlier macro backdrop and a cautious return by Western investors.

That structural demand has helped cushion gold through earlier periods of pressure. The World Gold Council said in August 2023 that higher yields and a stronger dollar had weighed on prices, while July’s rally that year was supported by a weaker dollar and firmer inflation expectations. The broader pattern underscores how sensitive bullion remains to shifts in rates, currency moves and perceptions of economic risk, even as long-term buying from central banks continues to provide support.