Gold Climbs to Three-Month High as Markets Await US Inflation Data

Gold prices extended their rally on Monday, reaching their highest level in over three months as investors positioned for key US economic data and a Federal Reserve speech later this week.

Spot gold rose 0.7% to $4,636.34 per ounce, its strongest since May 15, while US gold futures gained 0.3% to $4,694.80. The precious metal had already climbed more than 5% last week, supported by a weaker dollar following the US Treasury's buyback support plan. A softer greenback makes dollar-priced bullion more affordable for international buyers.

Market attention now turns to the July Personal Consumption Expenditures (PCE) price index and Fed Chair Kevin Warsh's address at the Jackson Hole symposium, both expected to offer fresh clues on the trajectory of US interest rates.

Goldman Sachs noted in a Friday report that gold prices could surpass its $4,900 year-end forecast, citing surging demand for bullish options that may amplify gains. Official-sector buying also remains robust, with Poland's central bank reporting its gold holdings rose to 20.6 million troy ounces (640.2 metric tons) at end-July, up from 20.3 million ounces a month earlier.

Geopolitical tensions added to bullion's safe-haven appeal after Iran's foreign minister dismissed the threat of new US sanctions as a sign of desperation. Trade frictions also simmered as Canada announced retaliatory tariffs on some US goods following President Donald Trump's 50% levies on Canadian products, after trade talks collapsed.

Among other metals, silver gained 0.8% to $69.51 per ounce, platinum rose 0.4% to $1,885.38, and palladium edged up 0.1% to $1,350.53.