Dollar Weakness Sends Gold Soaring to Three-Month High
Gold prices reached their highest level in over three months on Monday as the US dollar weakened further, pushing spot gold to $4,641.27 an ounce and futures to $4,697.70.
The dollar's decline was attributed to the Treasury's decision to expand buybacks of longer-dated securities, which raised concerns about debt sustainability and the purchasing power of the dollar.
According to Marc Chandler, managing director at Bannockburn Global Forex, gold's move above $4,600 has strengthened its technical position, potentially opening the way towards $4,680. However, he cautioned that momentum has become stretched after the rapid advance.
The coming days will be crucial for gold as investors await this week's inflation data and Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole Economic Policy Symposium on Friday.
Warsh's comments are expected to set the tone for the Fed's next policy signal, which could impact interest rates and subsequently affect gold prices. Higher rates would normally weigh on non-yielding assets like gold.