Gold Prices Hit Three-Month High Ahead of US Inflation Data and Fed Speech

Gold prices surged on Monday to their highest level in over three months as investors awaited US inflation data and Federal Reserve Chair Kevin Warsh's speech. Spot gold rose by 0.7% to $4,636.34 per ounce, its highest since May 15.

The upward trend is attributed to the dollar's weakness, which makes gold more affordable for holders of other currencies. Last week, US Treasury's buyback support plan pressured the dollar, leading to a 5% increase in gold prices.

Market participants will closely monitor this week's July Personal Consumption Expenditures (PCE) price index and Fed Chair Warsh's speech at the Jackson Hole symposium for clues on the US rate outlook. Goldman Sachs has forecasted a year-end target of $4,900, but gold prices could surge past that if demand continues to rise.

Official-sector demand is also contributing to the increase in gold prices. Poland's central bank reported a 0.3 million troy ounce increase in its gold holdings as of July 31 from June 30.