Gold climbed more than 2% to around $5,070 per ounce on Monday, its highest level in over a week, supported by softer real yields, a weaker US dollar, and renewed safe-haven demand ahead of key US economic releases. Inflation expectations in the US continued to moderate, with one-year-ahead consumer inflation falling to 3.1% in January and New York Fed measures slipping to six-month lows. This decline in inflation expectations lowered real Treasury yields, enhancing the appeal of gold as a non-yielding store of value.
Recent communication from the Federal Reserve also bolstered the outlook for easier policy, with Mary Daly signaling openness to one or two rate cuts and markets increasingly braced for softer labor market and CPI data this week. On the demand side, the People’s Bank of China extended its official gold buying for a fifteenth consecutive month, reinforcing steady institutional support.
Geopolitical dynamics remained a key backdrop: while US–Iran talks reduced the immediate risk of escalation, they did not eliminate broader regional tail risks, sustaining demand for gold as a hedge. The price rebound was further amplified by position rebuilding after late-January liquidations and renewed inflows into gold-backed ETFs.
