Gold Price Approaches $4,400 Mark: What Factors Drive the Precious Metal's Rise?

On Monday, August 17, gold prices rose on global markets and approached the $4,400 per ounce mark. The increase in demand for the precious metal was driven by a weakening US dollar, weak American economic indicators, and geopolitical tensions in the Middle East.

During trading, the current market price of gold increased by 0.5% and reached $4,399.44, while gold futures were priced at $4,455.90. At the same time, the US Dollar Index (USDIDX) declined by 0.2% and stood at 99.49. The weakening dollar supported demand for gold, as it became relatively cheaper for holders of other currencies to purchase it.

According to analysts, gold's position was strengthened by recent US economic data: the consumer sentiment index fell for the first time in three months. Retail sales declined most sharply in the past year.

These indicators reduced expectations that the Federal Reserve (Fed) will continue to tighten monetary policy, which traditionally has a positive effect on gold prices.

However, inflationary risks remain elevated. Several ship attacks in the Strait of Hormuz at the end of last week raised concerns about disruptions in energy supply. A potential rise in oil prices, in turn, could accelerate inflation, hindering central banks in easing monetary policy.

Against this backdrop, investors are waiting with particular attention for the Federal Reserve to release the minutes from its July meeting on Wednesday.

Demand for gold is also being boosted by purchases from central banks. According to ANZ data, central banks purchased a total of 244 tonnes of gold in the first quarter of 2026, while China alone increased its reserves by 8 tonnes in April.

According to ANZ analysts' forecast, amid geopolitical uncertainty and tensions in international relations, gold prices could reach $5,200 per ounce by year-end.

Source: Investing.com