The Voice , 14 August- International gold prices have climbed to their highest level in two months, reaching $4,465 per ounce on Wednesday, as investors responded to easing inflation concerns and expectations of a softer monetary policy stance from the US Federal Reserve.
Gold prices had fallen sharply following the outbreak of war involving Iran, as investors initially expected higher inflation and real bond yields. Since gold does not generate interest or dividends, higher yields made the precious metal less attractive, weakening its traditional appeal as a safe-haven asset during periods of uncertainty.
However, sentiment began to shift after the Federal Reserve’s policy meeting at the end of July, when investors interpreted policymakers’ signals as relatively accommodative. The release of more moderate US Consumer Price Index (CPI) data on Wednesday provided further support for gold prices.
Another factor behind the recent rally is strong demand from China. Beijing reportedly purchased nearly 20 metric tonnes of gold in July, marking its largest monthly purchase since October 2023.
The combination of stronger demand and expectations of less restrictive monetary policy has helped gold recover from its earlier decline, pushing prices to their highest level in roughly two months.
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