Gold hits 10-week high at $4,400 amid China demand, US-Iran uncertainty

Gold prices climbed to $4,400 per ounce on Tuesday, reaching their highest level since June 5 amid strong Chinese demand and uncertainty surrounding efforts to end the US-Iran conflict and reopen the Strait of Hormuz.

The bullion's price was up around 0.1% day-on-day as of 1310GMT, while jumping 8% weekly and 10% monthly.

The precious metal recovered after briefly giving up earlier gains as some investors took profits following its recent rally.

Chinese institutional investors continued to increase their bullion positions as a hedge against volatility in other markets, while gold-backed exchange-traded funds in China recorded their longest streak of inflows in months.

The People's Bank of China also accelerated its gold purchases in July, adding approximately 20 tons to its reserves after buying around 15 tons in June. The July increase was the largest since October 2023 and extended the central bank's buying streak to 21 consecutive months.

Geopolitical uncertainty also supported demand for safe-haven assets, with no final agreement yet between Washington and Tehran to end the conflict and restore normal shipping through the Strait of Hormuz.

Meanwhile, investors continued to assess the impact of rising oil prices on global inflation and the US interest-rate outlook. Higher energy costs could keep inflation elevated and encourage the Federal Reserve to maintain tighter monetary policy for longer.

Markets are awaiting key US inflation figures due this week for further indications about the Fed's next policy steps.