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GOLD AND SILVER START THE WEEK STRONGER

Gold and silver are climbing Monday as another round of soft U.S. economic data pushes expectations further away from a September Fed rate hike.

Metal

Friday

Monday AM

Direction

Gold

~$4,380

~$4,399

Silver

~$64.88

~$65.61

Gold is back near $4,400, while silver has broken above $65.

UNITED STATES

Retail sales disappointed: July retail sales fell 0.6%, versus expectations for a 0.1% increase—the first monthly decline in nine months. Core retail sales also fell 0.4%. Consumer sentiment dropped to 51.0 in August.

Inflation also softened: July PPI was unchanged versus expectations for a 0.2% increase, reinforcing the case for the Fed to remain on hold.

Markets now put the probability of a September rate hike near 30%, down from roughly 50% a week ago. A weaker dollar and slightly lower Treasury yields are supporting bullion Monday.

INDIA

India's physical gold market is showing increasing resistance to record prices. Dealer discounts widened Friday to their largest level in more than two months, signaling weak jewelry and retail demand despite the global rally.

Silver remains structurally tighter than gold following India's import restrictions and higher duties, although no major new silver-policy development emerged over the weekend.

India insight: Watch whether gold discounts begin narrowing as festive-season inventory building approaches. Continued widening would signal that affordability pressure is overpowering seasonal demand.

CHINA

The PBoC made the first mid-month use of its new overnight reverse-repo tool Friday, injecting a net 348 billion yuan—about $52 billion—into the banking system.

The operation appears aimed at easing funding pressures rather than supporting bullion directly, but easier liquidity and lower domestic yields are modestly supportive for gold.

China's broader economy also weakened in July, with industrial output growth slowing to 4.5% and retail-sales growth to 0.6%, reinforcing expectations that Beijing may maintain supportive monetary conditions.

CENTRAL-BANK GOLD WATCH

China added approximately 20 tonnes of gold in July, its largest monthly addition since October 2023, extending the PBoC's buying streak to 21 consecutive months and lifting reserves to roughly 2,378 tonnes.

South Korea is also returning to the market: the Bank of Korea plans to purchase domestically produced gold for the first time in 13 years, adding another developed-market central bank to the global diversification story.

WHAT TO WATCH

  • Wednesday: Minutes from the July Fed meeting

  • September Fed-hike odds

  • Gold resistance around $4,400–$4,450

  • Silver resistance around $66

  • Strait of Hormuz and oil-price developments

  • Whether India's physical gold discounts continue widening

KEY TAKEAWAY

The macro backdrop has turned more supportive for precious metals: weak jobs, softer inflation, falling retail sales and deteriorating consumer sentiment have pushed September Fed-hike odds toward 30%.

Gold is again testing $4,400 and silver has moved above $65, while continued central-bank buying and easier Chinese liquidity provide additional structural support.

For informational purposes only. Not investment advice.

Sources: Reuters, U.S. Bureau of Labor Statistics, U.S. Census Bureau, University of Michigan, CME Group/CME FedWatch, People's Bank of China, World Gold Council, Bank of Korea, India Bullion and Jewellers Association, Global Bullion Tracker.