Gold Surges to Three-Month High Ahead of Critical Inflation Data

Gold prices have reached a three-month high near $4,700 as investors await key inflation data and the Federal Reserve's Jackson Hole symposium. The metal briefly touched $4,696.18 per ounce on August 25 before easing to around $4,647.

The rally is driven by a weaker U.S. dollar, declining Treasury yields, and concerns about the long-term purchasing power of fiat currencies. China's net gold imports through Hong Kong increased by around 11% in July, further supporting demand.

Gold has broken above several technical resistance levels, but traders are waiting for the upcoming inflation data to decide whether the rally will continue. The Personal Consumption Expenditures (PCE) inflation report is expected on August 26, and a softer-than-expected reading could strengthen expectations that the Fed will not need to raise interest rates further.

U.S. Treasury Secretary Scott Bessent's announcement of larger buybacks for longer-dated government securities has also contributed to gold's rise. The program aims to support liquidity in long-duration bonds and has led to a decline in long-term yields, making gold more attractive as an investment.