Gold climbs above $4,200 as ETF inflows hit four-year high before US inflation data

Inflows into gold-backed funds reached their highest level in four years as traders awaited this week's US inflation report, Bloomberg data show.

Gold traded above $4,200 in early Asian dealing, extending a rebound from a two-month low near $4,067 hit earlier this month, according to FXStreet. The metal remains well below its all-time high of $5,608.35 an ounce, reached in January, Trading Economics data show.

Inflows into gold-backed exchange-traded funds climbed to their highest level in four years, Bloomberg data cited by FXStreet showed, as investors positioned ahead of the September US Consumer Price Index report due Wednesday at 8:30 a.m. Eastern. Producer Price Index and retail sales figures follow on Thursday.

The buying comes after a volatile stretch for gold tied to shifting expectations for Federal Reserve policy, including a session on Friday when the metal found support near $4,000 before rebounding. Steady inflows ahead of the inflation report suggest investors are positioning for a print that could reinforce the case for interest rate cuts rather than derail it, since fresh buying in gold tends to accelerate when traders expect looser policy to weigh on the dollar and on real yields.

The scale and persistence of the inflows point to conviction building among investors rather than short-term positioning. A soft inflation reading could extend gold's advance as rate-cut bets firm up, while a hotter than expected print would test whether the current wave of fund buying holds or reverses quickly.