Gold Surges to Three-Month High on Softer Dollar and Safe-Haven Demand
Gold prices have surged to a three-month high as markets await crucial US inflation data and Federal Reserve Chair Kevin Warsh's remarks at the Jackson Hole symposium. The yellow metal has extended its robust rally, climbing to its highest level since mid-May.
The price surge is largely attributed to a softer US dollar, easing long-term Treasury yields, and heightened safe-haven demand amid growing geopolitical tensions. According to Reuters, spot gold rose 0.7% to trade around $4,636-$4,641 per ounce, while U.S. gold futures hovered near $4,697 per ounce following a sharp 5% weekly gain.
The subdued US dollar is sliding near multi-month lows following the US Treasury's long-bond buyback initiative, making greenback-priced bullion more affordable for international buyers. Investors are closely eyeing the upcoming July Personal Consumption Expenditures (PCE) price index, which serves as the Federal Reserve's preferred inflation gauge.
Chief market analyst Tim Waterer at KCM Trade noted that gold is 'looking sprightly to start the week' and has stepped back into bid mode. He believes traders will be listening closely for any shift in tone on the policy path and how it sits with recent bond-market developments, which could keep the door open for gold to extend its gains.