Gold hits over 3-month high ahead of US inflation data, Fed chair speech

Gold prices surged to their highest level in over three months on Monday as a weaker dollar provided support to the precious metal. The spot price of gold rose 0.5%, reaching $4,627.42 per ounce, after surging over 5% last week. US gold futures also gained 0.1%, closing at $4,683.80. The dollar's wobble lingered near multi-month lows as the US Treasury announced plans to repurchase long bonds.

Analyst Tim Waterer noted that the softer dollar has made gold more attractive to investors holding currencies other than the US dollar. Gold is expected to benefit from the upcoming release of key US inflation data and Federal Reserve Chair Kevin Warsh's speech at the upcoming Jackson Hole symposium. Traders will be closely monitoring the tone of Warsh's speech and its alignment with recent developments in the bond market.

A cautious approach that leaves room for policy flexibility could help gold continue its upward trajectory. Meanwhile, elsewhere, the US has warned Iran of "the greatest financial offensive ever marshalled" in preparation for targeted economic sanctions against Iran's trading partners. This has led to a slight dip in oil prices as investors reap profits before the anticipated announcement.

In other precious metals, silver dipped 0.3% to $68.76 per ounce, while platinum and palladium fell by 0.5% and 0.3%, respectively, to $1,868.03 and $1,345.87.