Gold prices rise more than 5% in the previous week as investors await US inflation data and Federal Reserve Chair Kevin Warsh’s Jackson Hole speech for clues on the interest-rate outlook.
Gold prices climbed to their highest level in more than three months on Monday, supported by a weaker US dollar as investors turned their attention to upcoming US inflation data and a closely watched speech by Federal Reserve Chair Kevin Warsh.
Spot gold rose 0.8 per cent to $4,641.27 an ounce by 0427 GMT after touching its highest level since May 15 earlier in the session. The precious metal had gained more than 5 per cent last week. US gold futures were up 0.4 per cent at $4,697.70 an ounce.
The dollar hovered near multi-month lows, making gold more affordable for buyers holding other currencies and providing fresh support to bullion prices.
“Gold is looking sprightly to start the week,” said Tim Waterer, chief market analyst at KCM Trade, noting that the metal was taking its cues primarily from the softer dollar, higher yields and growing concerns over economic and policy uncertainty.
US inflation data, Fed speech in focus
Investors are now awaiting the July Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, for clues about the trajectory of US interest rates.
Markets will also closely track Warsh’s speech at the Jackson Hole economic symposium later this week. Traders are expected to look for any indication of how the Fed views inflation, interest rates and recent volatility in the US bond market.
More from BusinessA cautious or balanced tone from the Fed chair could keep expectations of policy flexibility alive and provide further support to gold, Waterer said.
Gold has also benefited from broader concerns over economic uncertainty and shifting expectations around US monetary policy. The Treasury’s plans to buy back longer-dated bonds have added to market debate over US debt and the dollar’s outlook.
Iran tensions add to market uncertainty
Geopolitical risks remain another factor supporting demand for safe-haven assets. The United States has threatened Iran with what it described as its “greatest financial offensive ever marshalled”, with sanctions expected to target Iran’s trade partners.
Oil prices fell by more than $1 a barrel on Monday as investors booked profits ahead of the expected announcement.
Among other precious metals, spot silver was steady at $68.98 an ounce, while platinum rose 0.1 per cent to $1,878.88. Palladium was little changed at $1,350 an ounce.
