Gold Hits Three-Month High as Dollar Weakens
Gold prices have surged to a three-month high, fueled by a weakening US dollar and technical momentum. The metal climbed 1.5% to $4,587.23 per ounce on Friday, its highest since May 15. This marks the third consecutive week of gains for gold.
The US Treasury's surprise mid-week liquidity support announcement has contributed to the rally, as well as concerns over spiraling US debt and fiscal sustainability. Ole Hansen, head of commodity strategy at Saxo Bank, noted that investor concerns about US debt levels and a softer dollar are driving the market.
Despite the recent price gains, some analysts caution that bullion bulls may need to wait for the latest Fed policy signals out of Jackson Hole in the week ahead before attempting to reclaim the $5k handle. Gold's rally has also been accompanied by a decline in retail buying in India, while demand in top consumer China remains steady.