Gold hits three-month high as investors await US inflation data

Gold prices continued their upward trend on Monday, reaching their highest level in more than three months as investors awaited US inflation data and a speech by Federal Reserve Chair Kevin Warsh later this week, seeking clues about the future direction of interest rates.

Spot gold rose 0.7% to $4,636.34 per ounce by 00:15 GMT, marking its highest level since May 15, while US gold futures gained 0.3% to $4,694.80.

Gold had already climbed over 5% last week after a US Treasury Department support plan, which included bond buybacks, put pressure on the dollar. A weaker dollar makes the dollar-priced precious metal less expensive for holders of other currencies.

Market attention is focused on the US Personal Consumption Expenditures (PCE) price index for July, as well as the Federal Reserve Chair's speech at the Jackson Hole symposium this week, for fresh signals on US interest rate expectations.

Goldman Sachs said in a note on Friday that gold prices could surpass its year-end forecast of $4,900 per ounce, citing rising demand for bullish gold options as a factor that could support further gains.

In a sign of continued official demand for the precious metal, Poland's central bank announced its gold reserves rose to 20.6 million troy ounces, or 640.2 metric tons, at the end of July, up from 20.3 million ounces at the end of June.

On the geopolitical front, Iran's foreign minister described the threat of new US sanctions as a sign of desperation, insisting that the expected measures would not succeed in defeating Tehran, which further boosts gold's appeal as a safe haven.

In trade developments, Canadian Prime Minister Mark Carney said on Saturday that Canada would impose tariffs on certain US goods in response to the 50% tariffs ordered by US President Donald Trump on Canadian products, following the collapse of trade talks between the two countries.

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