Gold Hits Three-Month High as Dollar Weakens, Fed Signals in Focus

Gold prices climbed to their highest in more than three months on Monday, building on a sharp weekly gain as the U.S. dollar slid and traders positioned for critical policy signals from the Federal Reserve.

Spot gold rose 0.7% to $4,637 an ounce early in the session and later touched $4,673.20, a level not seen since May 14, according to market data. U.S. gold futures for December delivery advanced 1.1% to $4,730.40 an ounce. Last week, bullion jumped over 5%.

The rally was powered by a weakening dollar, which fell to multi-month lows after the U.S. Treasury Department announced a bond buyback support plan. The move dragged the greenback lower, making dollar-denominated gold more attractive to international buyers. The dollar also lost momentum amid worries about Washington’s swelling fiscal obligations, which have reached $40 trillion after doubling in under ten years, as reported by RTTNews.

Market sentiment turned firmly bullish after gold broke above its 200-day moving average last week, triggering technical buying. Bond yields stabilized and dipped slightly, providing a tailwind for the non-yielding metal.

Traders are now turning their attention to a busy week of U.S. economic data and Fed commentary. The July Personal Consumption Expenditures (PCE) price index—the Federal Reserve’s preferred inflation gauge—is due Wednesday, August 26, according to multiple reports. Fed Chair Kevin Warsh is scheduled to deliver his debut address at the annual Jackson Hole Symposium on Friday, with investors parsing his remarks for clues on the central bank’s interest rate trajectory.

Additional data releases include U.S. GDP estimates, durable goods orders, and consumer confidence figures, offering further insight into the economy’s strength.

Market participants are also bracing for the announcement of fresh U.S. sanctions aimed at Iran. Treasury Secretary Scott Bessent will hold a press conference later Monday, where he is expected to unveil tougher measures to economically isolate Iran. Iranian Foreign Minister Seyed Abbas Araghchi described the renewed sanctions threats as a reflection of desperation after what he called the failure of previous measures, RTTNews reported.

Institutional demand surged alongside the price move. According to data from the World Gold Council cited by The Economic Times, gold-backed ETFs recorded massive inflows of 46.7 metric tons ($6.4 billion) last week—the strongest weekly demand surge in 10 months. North American and European funds led the buying wave.

The broader precious metals complex followed gold higher. Spot silver edged up 0.2% to $69.06 an ounce, platinum added 0.8% to $1,892.03, and palladium gained 1.8% to $1,374.27, according to Reuters data reported by The Economic Times.

In India, gold futures on the Multi Commodity Exchange (MCX) for October delivery traded higher by Rs 908, or 0.56%, at Rs 1,63,346 per 10 grams, as reported by NDTV Profit.

Analysts struck a cautiously optimistic tone. “Softer dollar expectations, safe-haven demand and global interest-rate cues continue to support precious metals. For the week ahead, we expect the outlook to remain cautiously bullish, though elevated prices could lead to some profit-booking and volatility,” Darshan Desai, CEO of Aspect Bullion & Refinery, told NDTV Profit.

Technical indicators suggest strong momentum but warn of potential pullback. NDTV Profit reported that Ponmudi R, CEO of Enrich Money, noted that MCX gold’s relative strength index (RSI) at 76.98 is deeply overbought, confirming very strong momentum but leaving the market vulnerable to a sharp pullback near highs. He identified immediate resistance at Rs 1,64,500–Rs 1,65,000 and support at Rs 1,60,600–Rs 1,60,000. The bias stays constructive above Rs 1,62,000, with a break below signaling a sharper correction.