Gold Tops $4,400 as Investors Weigh Softer US Data Against Oil Risks

Gold prices climbed on Monday, surpassing the $4,400 per ounce mark as investors weighed softer U.S. economic data against persistent geopolitical risks that threaten to keep inflation elevated. The market is keenly awaiting minutes from the Federal Reserve's latest meeting for further guidance on the path of interest rates.

At 21:12 ET (01:12 GMT), prices for spot gold (XAU/USD) were up 0.7% at $4,408.12 an ounce, while gold futures gained 0.6% to $4,464.30, according to Investing.com data. The U.S. Dollar Index traded 0.1% lower, providing an additional tailwind for the dollar-denominated commodity.

Softer Data Fuels Rate Cut Hopes

The precious metal drew support from recent U.S. economic reports that tempered expectations for further monetary tightening. Recent data showed U.S. consumer sentiment declined for the first time in three months, while retail sales posted their biggest monthly drop in more than a year.

These weaker readings reduce pressure on the Federal Reserve to maintain a hawkish policy stance, which benefits non-yielding assets like gold. Investors are now focused on Wednesday's release of the minutes from the Fed's July meeting, which will be scrutinized for fresh clues on policymakers' thinking.

Geopolitical Tensions Underpin Inflation Risks

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Counterbalancing the dovish economic signals are renewed tensions in the Middle East. Recent attacks on several ships in the Strait of Hormuz have injected volatility into global energy markets, raising the prospect of higher oil prices.

A sustained rise in energy costs could reignite inflationary pressures, complicating the Federal Reserve's ability to pivot toward monetary easing. This dynamic creates a complex environment where gold's appeal as an inflation hedge is weighed against the potential for higher-for-longer interest rates.

Strong Demand and Analyst Outlook

Underlying support for gold prices also comes from robust physical demand, particularly from central banks. Analysts at ANZ noted that central banks purchased 244 tonnes of gold in the first quarter of 2026, the strongest quarterly total since the fourth quarter of 2024.

The brokerage anticipates that deteriorating international relations will continue to fuel demand for gold as a diversification asset. Citing these factors, ANZ projects that gold could rise toward $5,200 an ounce by year-end, according to the report.