FX.co ★ Gold Extends Gains for 2nd Week

Gold climbed above $4,380 an ounce on Friday, rebounding from earlier losses and securing a second straight weekly gain as investors reassessed the outlook for US monetary policy. Recent US CPI and PPI readings indicated that inflation pressures remain contained, suggesting that the impact of higher energy prices related to the Iran conflict eased in July and tempering expectations of a more aggressive Federal Reserve stance. Markets are now pricing in roughly a one-in-three chance of a rate hike in September, though upcoming employment data and remarks from Fed Chair Kevin Warsh at the Jackson Hole symposium could still shift those expectations. Geopolitical risks remain a key driver, as any renewed flare-up could push energy prices higher and reignite inflation worries. At the same time, robust central-bank demand continues to underpin gold, with China adding about 20 tonnes to its reserves in July, extending its buying streak to a 21st consecutive month.