I. Gold Extends Strong Bullish Rally
Spot gold continued its upward rally during the August 11 Asian morning session, reaching 4432.49 USD/oz with a daily gain of 42.99 USD (+0.98%) and touching an intraday high of 4435.29 USD/oz, setting a new eight-week peak.
Gold rallied sharply from near 4388 USD, consecutively breaking above 4400 USD and 4420 USD thresholds. Short-term moving averages remain sloped upward with active buying interest.
Weak US labor data prompted recalibrated Fed policy expectations, while persistent Middle East geopolitical uncertainty continues to fuel precious metals demand.
II. Central Banks Maintain Consistent Gold Reserve Accumulation
Official reserve allocation provides robust fundamental support for recent price gains.
People's Bank of China data indicates gold reserves reached 76.08 million ounces by end-July 2026, up 640,000 ounces from June, marking 21 consecutive months of reserve expansion.
Globally, official sector demand remains elevated, with central bank net purchases reaching 289 metric tons in Q2 2026, up 62% year-over-year.
Sustained official demand offers stable medium-to-long-term support, highlighting gold's essential role in reserve diversification amidst macroeconomic uncertainties.
III. Focus Shifts to Upcoming US CPI and PPI Releases
Market attention shifts toward July US CPI and PPI releases.
Consensus estimates project month-over-month CPI to rebound to +0.1% from -0.4%, with year-over-year CPI moderating to 3.4% from 3.5%. Core CPI is expected to rise 0.1% month-over-month and 2.5% year-over-year.
Following weak labor market figures, expectations for further Fed tightening cooled significantly, elevating the strategic importance of this week's inflation reports.
If inflation continues to moderate, the need for Fed rate hikes diminishes, capping Treasury yields and bolstering gold momentum. Conversely, hotter-than-expected data could spark sharp yield rebounds and volatility.
IV. Strait Negotiations and Geopolitical Deadlocks Persist
Beyond economic data, Strait of Hormuz transit negotiations remain a central driver.
While talks mediated by Oman progressed, Iran insisted on sanction relief, war damage compensation, and security guarantees, creating hurdles for a final deal.
Ongoing security incidents continue to sustain market anxieties regarding energy shipping lane stability.
V. Market Outlook
Gold maintains strong upward momentum, narrowing its distance toward the key 4500 USD psychological handle.
Short-term support anchors near 4400 USD, with upside focus on 4450 USD and 4500 USD. If CPI figures cool and geopolitical friction persists, gold is well-positioned for further gains.
However, given the rapid rally pace, elevated high-level volatility is expected. Inflation prints and geopolitical developments will determine whether gold challenges 4500 USD.