Gold turned in its best week since January after tame U.S. inflation data cut the odds of a Federal Reserve rate hike. The metal remains volatile after tumbling from an early-2026 record, but central bank buying and a rebound in mining stocks are adding support.
Gold posted its best week since January as fading odds of a Federal Reserve rate hike lifted the metal's appeal against other rate-sensitive assets. Gold mining stocks had their hottest five-day run since 2008 over the same stretch.
The move followed a rough stretch for the metal. Gold had fallen by as much as 18% from a 10-year high above $5,300 an ounce hit earlier in 2026, according to Goldprice.org, leaving its year-to-date return close to flat. It is still higher by over $1,000 over the past one-year period.
Patrick Kennedy, founder of Hartford-based AllSource Investment Management, said the hike tail risk came out of the market after the latest inflation report. He noted the Consumer Price Index came in at 0.1% monthly and 3.4% annually, with core inflation at 2.5%, in line with expectations. Nick Cawley of Solomon Global said odds of a rate hike were already down by more than 20 percentage points in the past week, pointing to the benign inflation trend and last Friday's soft non-farm payrolls report.
Central banks kept buying through the swings. Kennedy said the People's Bank of China added 19.9 tons in July, its largest monthly addition since October 2023 and its 21st straight month of accumulation. Continued buying in China and India, the centers of physical gold demand, is adding further support to prices, according to Eugenia Mykuliak of B2Prime Group.
Miners outperform bullion
Some investors have shifted into gold mining stocks in search of value, said Vince Stanzione, an independent trader. He pointed to AngloGold Ashanti and Newmont, both trading on single-digit forward price-to-earnings ratios. Kennedy said Van Eck's GDX ETF did roughly three times gold's move last week. Shawn Young, chief analyst at MEXC Research, said mining-focused funds carry operating leverage and equity risk beyond the underlying metal's own price swings.
Silver, which moves in sync with gold, had its best week since February.
Rate outlook stays uncertain
Kennedy cautioned against reading too much into the shift. According to Kennedy: "This is not a rate cut trade, at least not yet." The Fed has been parked at 3.50% to 3.75% all year, he said, and September remained live for a rate hike until last week's payrolls miss.
Joe Cavatoni of the World Gold Council said more volatility could lie ahead, with the upcoming Federal Reserve meeting in Jackson Hole among the factors that will help decide whether the rally continues. New Fed Chair Kevin Warsh has also shifted the landscape: his cautious and often ambiguous statements have pushed some money out of stocks and into gold, according to Eugenia Mykuliak of B2Prime Group.
Source: US Top News and Analysis
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