Gold Soars Past $4,668 as Dollar Debasement Fears Return

Gold prices surged past $4,668 on Tuesday before easing to about $4,640 an ounce as investors shifted their focus from US fiscal concerns to inflation data and Federal Reserve Chair Kevin Warsh's first Jackson Hole address.

The brief rally came after the Treasury announced it would double the maximum size of liquidity-support buybacks for 10- to 30-year securities, sparking fears of dollar debasement and sending investors towards bullion.

TD Securities commodity analysts noted that fiscal concerns and potential further Treasury intervention should continue supporting gold through dollar weakness, but cautioned that higher energy costs could revive inflation and force the Fed to tighten further.

The next challenge for gold arrives on Wednesday with July's Personal Consumption Expenditures report, which is expected to show core PCE rising 0.2% from June, leaving the annual rate around 3.2%, according to Barclays economist Pooja Sriram.