Gold prices resumed their upward move over the past two days after nearly a month of consolidation, with spot gold briefly climbing back above $4,300 per ounce and hitting its highest level since early July, according to BlockBeats on Aug. 6.
The latest rebound was not driven by one factor alone. It came from a combination of shifting macro policy expectations, official-sector demand, institutional flows and broader market sentiment.
Weak US labor data cools tightening bets
On the macro side, US ADP employment increased by only 44,000 in July, well below market expectations, pointing to continued cooling in the labor market. That quickly led investors to lower expectations for further Federal Reserve tightening.
At the same time, expectations for a September rate hike faded noticeably. US Treasury yields and the dollar both moved lower, making gold more attractive again as a non-yielding asset. The market is now waiting for nonfarm payroll data to see whether the US economy is slowing further.
Energy and geopolitical shifts add support
Geopolitical conditions also played a part. Tensions around the Strait of Hormuz have recently shown signs of easing. Diplomatic talks involving the US, Iran and Oman made progress, leading markets to expect lower risks to global energy transportation.
That helped pull international oil prices lower and reduced energy inflation expectations. In turn, it weakened market bets that the Fed would keep a hawkish policy stance, giving gold another near-term catalyst.
Central bank demand remains a long-term pillar
Official demand is still seen as the most important long-term support for the gold market. The Bank of Korea said it would resume gold purchases after a 13-year pause. It has already started allocating to gold ETFs and also plans to establish a mechanism for buying physical gold in South Korea.
Data from the World Gold Council showed that global central banks made net gold purchases of 288.9 tons in the second quarter of 2026, up 62% from a year earlier and the highest level on record for the same period. The figures point to continued reserve diversification by central banks and steady strategic demand for gold.
Asian inflows and ETF demand strengthen the market
On the flow side, Chinese gold ETFs have recorded net inflows for 14 consecutive trading days, the longest streak since March this year.
Macro funds have also kept adding gold exposure since June, while Asian capital has returned to the gold market. Gold on the Shanghai Gold Exchange has again moved to a premium over London prices, reflecting an improvement in Asian spot demand and offering support for the recent stabilization and rebound in prices.
Wall Street firms keep long-term upside targets
Several Wall Street institutions continue to hold a bullish medium- to long-term view on gold.
Deutsche Bank said gold remains in what it described as an “explosive upside phase” that began in 2024, and it maintained a year-end 2026 target of $4,600. UBS said gold could rise to $4,600 by the end of this year, backed by continued central bank buying, a recovery in investment demand and a turn in Federal Reserve policy, with prices potentially challenging $5,000 in 2027.
Citigroup and State Street Global Advisors have also said that continued central bank buying and sustained fund inflows leave room for further upside in gold over the medium to long term.