Gold Climbs to $4,351 as ETF Inflows Hit $18 Billion in August

Key Points:

• Gold rebounded 0.8% to $4,351.28 an ounce Friday, recovering part of Thursday’s 1.8% drop, though it remains on track for a third straight weekly decline.
• Markets now price roughly a 70% chance of a Fed rate hike this month after August producer prices rose 0.4%, the sharpest increase since May.
• Global gold ETFs took in $18 billion in August, the second-largest monthly inflow on record, lifting holdings to a record 4,189 tonnes.

Gold prices rose Friday as a weaker dollar offset pressure from climbing oil prices and Treasury yields. Investors are weighing a Federal Reserve decision next week, with hike odds building on hotter-than-expected inflation data. The metal remains split between safe-haven buying and the drag of tighter policy expectations, leaving it on pace for a third consecutive weekly loss even after Friday’s bounce.

Hotter PPI, Oil Revive Rate-Hike Bets

At 01:59 ET (05:59 GMT), XAU/USD traded at $4,351.28 an ounce, up 0.8%, while Gold Futures fell 0.4% to $4,391.37. Silver (XAG/USD) rose 0.8% to $64.10, and platinum (XPT/USD) gained 1.1% to $1,801.18. The U.S. Dollar Index was flat at 99.04.

August’s producer price index rose 0.4%, the fastest pace since May, adding to concerns that energy costs are pushing broader inflation higher just before the Fed’s meeting. Brent crude has climbed toward $108 a barrel as the conflict between the United States and Iran continues without resolution. U.S. forces have struck Iranian oil tankers, Iran has fired missiles at a Jordanian airbase, and Houthi forces backed by Tehran have targeted Saudi infrastructure — all factors keeping energy markets on edge.

ETF Demand Provides Longer-Term Support

Institutional demand for gold has held firm despite the daily volatility. The World Gold Council reports holdings rose 121 tonnes in August to a record 4,189 tonnes, with assets under management up 16% to $615 billion. Gold returned 13% for the month, its third-strongest monthly gain in 25 years.

Key Price Levels to Watch

Tony Sycamore, senior market analyst at IG, points to gold’s 200-day moving average near $4,537 as the level that needs to be reclaimed to confirm the pullback from the $4,697 high has run its course. Without that recovery, he sees room for a deeper slide toward $4,200.

Conclusion

Gold’s next move depends heavily on the Fed’s decision next week. A rate hike would likely extend the current pullback, while a pause could reignite the momentum behind August’s record ETF inflows. With the Iran conflict unresolved and inflation data running hot, price swings in bullion are likely to continue regardless of which way the Fed moves.