Gold Surges to Three-Month High on Weaker Dollar and Fed Uncertainty

Gold prices rose to their highest level in over three months on Monday, hitting $4,641.27 per ounce as investors turned their attention to key US inflation data and a speech by Federal Reserve Chair Kevin Warsh later this week.

The spot gold price gained 0.8% and has extended a rally that saw prices increase more than 5% last week. US gold futures also edged 0.4% higher to $4,697.70.

Market analysts attribute the move mainly to the weaker dollar, which makes gold more affordable for buyers holding other currencies. The market was also unsettled by the US Treasury's plans to buy back more long-term bonds.

Investors are awaiting the July Personal Consumption Expenditures (PCE) price index and Fed Chair Warsh's speech at the Jackson Hole symposium later this week for fresh clues about the US interest rate outlook. A balanced or cautious tone from Warsh could leave room for further gains in gold, according to Tim Waterer, chief market analyst at KCM Trade.