• Gold surges 1% as US Treasury yields retreat ahead of key CPI data, with the 10-year yield down to 3.902%.
• Ongoing tensions in the Middle East, with no ceasefire in sight, drive demand for Gold’s safe-haven status.
• Traders await critical US inflation and Retail Sales reports with Fed commentary signaling cautious optimism on disinflation.

Gold price rallied over 1% on Monday during the mid-North American session as US Treasury bond yields retreated ahead of a busy economic calendar in the United States. Traders are bracing for the latest Consumer Price Index (CPI) report for July, which is expected to show an improvement in the disinflation process. The XAU/USD trades at $2,467 after bouncing off a daily low of $2,423.

Sentiment shifted sour amid ongoing developments in the Middle East. Israel, Lebanon and Iran's lack of efforts to reach a ceasefire agreement kept market participants uneasy. This triggered a flight to Gold’s safe-haven status due to a possible escalation of the conflict.

US Treasury bond yields edged lower with the 10-year benchmark note rate down four basis points (bps) to 3.902%, ahead of the release of inflation data.

In the meantime, Federal Reserve Governor Michele Bowman was neutral, contrary to her usual hawkish posture and said that some progress on inflation is welcome, according to data from the last two months.