Gold Back Above USD $4,400: What's Driving the Rally?

Precious metals built on their recent recovery over the past week, with gold and silver both consolidating above key support levels following the recent rally that at one point saw gold trade above USD $4,400 per troy ounce (oz) and silver above USD $65oz respectively. 

This has been off the back of softer U.S. inflation figures (CPI and PPI) combined with weak July employment data and retail sales, reducing expectations of further Federal Reserve tightening, supporting investor demand for precious metals.  

Weekly Performance 

• Gold: +0.8% week-on-week, currently trading USD $4,385oz and AUD $6,185oz.   

• Silver: +3.7% week-on-week, outperforming gold at approximately USD $65oz and AUD $92oz.  

Key Drivers 

• Falling expectations of a September Fed rate hike (July highs of 82%, currently down to 33%), following weaker labour market data (Non-Farm Payrolls data -23K vs 79K forecast), inflation (CPI +0.1%), and retail sales data (-0.6% month-on-month).  

• A softer U.S. dollar (U.S. Dollar Index or DXY falling below 100 to 99.66 currently) and easing real yields (US 10Y currently 2.41%, down from recent highs of 2.43%), provided an additional tailwind. 

Markets will remain focused on incoming U.S. economic data and evolving Fed expectations. Any further signs of slowing growth or easing inflationary pressures could extend the recent rally we’ve seen since 4 August 2026 (Gold +8% and Silver +12% in USD terms).  

While elevated oil prices (WTI U.S. crude oil futures currently trading at USD $82.48/BLL, +5.1% week-on-week) and ongoing geopolitical tensions remain potential near-term risks to the rally, their inflationary impact could revive expectations of further monetary tightening, particularly as the situation in the Middle East remains fragile. 

Jordan Eliseo
General Manager, ABC Bullion

Luke Tyler
Senior Analyst, ABC Bullion

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