Gold tops $4,600 and investors eye PCE data and Jackson Hole

Gold prices rose at the start of the week, extending the positive momentum from the previous week. Ongoing concerns over US fiscal sustainability have been supporting the precious metal, while stabilising Treasury yields and a softer dollar, following the US Treasury’s decision to increase its purchases of longer-dated bonds, have provided further impetus to the rally. The result has been a sharp rise in gold prices, with the precious metal moving above $4,600, a level not seen since May. Against this backdrop, investors will pay close attention to the release of US PCE inflation data later this week. PCE is the Federal Reserve’s preferred inflation measure and can influence market expectations regarding the central bank’s interest rate path. The Jackson Hole Symposium, organised by the Federal Reserve, will be another highlight of the week. Traders will pay close attention to Chair Kevin Warsh’s speech for clues about the outlook for monetary policy. Any shift in expectations for further rate hikes could have a significant impact on the dollar and, consequently, gold prices. Gold traders will also remain focused on developments surrounding the US-Iran war. The conflict continues to disrupt oil and gas exports from the Persian Gulf, keeping energy prices elevated and adding to inflationary pressures, a dynamic that could limit the upside for gold.