Dollar Weakness Boosts Gold to 3-Month High Ahead of Inflation Data

Gold prices surged on Monday, reaching their highest levels in more than three months. The metal's value climbed as the dollar weakened, making gold more affordable for holders of other currencies.

The spot price of gold rose 0.5% to $4,627.42 per ounce, while US gold futures edged 0.1% higher to $4,683.80. Gold prices gained over 5% last week, and market analysts are attributing the recent increase to a softer dollar.

Tim Waterer, chief market analyst at KCM Trade, noted that gold is looking 'spritely' to start the week, with its cues primarily coming from the softer dollar. He added that traders will be watching for any shift in tone on the policy path and how it sits with recent bond-market developments.

The focus is now shifting to key US inflation data and a speech by Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium this week. The July Personal Consumption Expenditures (PCE) price index data will be closely watched for fresh clues on the US interest rate outlook.