Gold Prices Hit 3-Month High As Weak Dollar, Fed Rate Outlook Support Bullion
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Gold touched its highest level in over three months as dollar weakness and Treasury bond buyback plans drove fresh buying, with markets awaiting US inflation data and Fed Chair Warsh's Jackson Hole speech for the next cue.
Gold prices extended their recent gains on Monday, August 24, with the metal touching its highest level in more than three months as a softer US dollar supported demand for bullion.
Spot gold was up 0.8% at $4,641.27 an ounce as of 0427 GMT, after rising to its highest level since May 15 earlier in the session. The metal had gained more than 5% last week. US gold futures also moved higher, rising 0.4% to $4,697.70 an ounce.
The latest move comes as the dollar remains close to multi-month lows. Since gold is priced in dollars, a weaker US currency makes the metal relatively cheaper for buyers using other currencies, helping support demand.
According to Reuters, Tim Waterer, chief market analyst at KCM Trade, said gold had started the week on a stronger footing, with the softer dollar and uncertainty around economic conditions and monetary policy providing support.
US Inflation Data, Fed Speech To Set Next Direction
Investors are now looking towards the July Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, for clues about the path of US interest rates.
A speech by Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium later this week will also be closely watched. Any indication of how the Fed views inflation, interest rates and recent movements in the bond market could influence both the dollar and gold prices.
A cautious tone from the Fed that keeps the possibility of policy flexibility open could provide further support to bullion, Waterer said, according to Reuters.
Gold does not pay interest, which means expectations around US rates remain an important factor for the metal. A shift towards lower rates can reduce the opportunity cost of holding gold and make the asset more attractive to investors.
US-Iran Tensions Also In Focus
Geopolitical developments remain another factor for precious metals and broader commodity markets.
The US has threatened Iran with a major new round of economic sanctions aimed at the country's trade partners. Markets are waiting for details of the measures and their potential impact on global trade and energy flows.
Oil prices, meanwhile, declined by more than $1 a barrel on Monday as investors took some profits ahead of the expected announcement.
Other precious metals were mixed. Spot silver was largely unchanged at $68.98 an ounce, while platinum rose 0.1% to $1,878.88. Palladium was flat at $1,350 an ounce.
Also Read - Market Midday, 24 August 2026: Sensex, Nifty 50 Trade Lower
This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Rochelle Britto has spent 8+ years decoding India's markets, businesses, and consumer economy, reporting for ET Prime and Times Internet along the way, covering the stories behind the numbers.
A Mumbai native and perpetual planner of the next holiday, she stays far, far away from the eternal question, “Where are we going next?” When she's not chasing headlines, she's chasing new cultures, open roads, and a bit of quiet in nature.
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