Gold Hits 3-Month High As Weak Dollar Puts Fed Policy And Inflation In Focus

Gold rose 0.8% to $4,641.27 an ounce on Monday, Aug. 24, reaching its highest level since May 15, as weakness in the U.S. dollar supported demand for the greenback-priced metal. U.S. gold futures gained 0.4% to $4,697.70.

The move followed a more than 5% gain last week and came as investors prepared for July U.S. inflation data and Federal Reserve Chair Kevin Warsh’s speech at the Jackson Hole Economic Policy Symposium on Aug. 28. The Bureau of Economic Analysis is scheduled to release July Personal Income and Outlays data, including the PCE price index, on Aug. 26.

Dollar Weakness Gives Gold Another Lift

The U.S. dollar remained near multi-month lows on Monday, improving the purchasing power of investors holding other currencies. Gold had already gained 5% during the previous week, according to Reuters market data.

The latest move follows renewed attention to U.S. Treasury market conditions after the Treasury announced an expansion of liquidity-support operations for longer-dated government securities. The World Gold Council said the announcement was followed by a decline in longer-term yields and the dollar, while gold rallied 3%.

The Treasury’s intervention has added another variable for bullion markets because changes in long-term government bond yields can alter the relative attractiveness of non-yielding gold. The Federal Reserve’s Aug. 19 minutes also showed that several policymakers were prepared to consider higher interest rates because of inflation concerns, according to the Reuters report supplied for this article.

Inflation Data Sets the Next Test for Gold

The July PCE report due Wednesday will provide the latest official measure of consumer inflation watched by the Federal Reserve. The BEA’s June data showed core PCE inflation at 3.3% year over year, while the next monthly release is scheduled for Aug. 26.

The latest Consumer Price Index data provide a separate measure of price pressures. The U.S. Bureau of Labor Statistics reported that headline CPI rose 3.4% over the 12 months through July, while core CPI increased 2.5%; monthly headline CPI rose 0.1% on a seasonally adjusted basis.

Energy prices moved in the opposite direction in July, with the BLS reporting a 1.5% monthly decline in the energy index. Shelter increased 0.1% and accounted for roughly two-thirds of the monthly rise in headline CPI, giving investors a more detailed picture of the components behind the inflation reading.

Warsh Speech Could Shape Rate Expectations

The Federal Reserve has scheduled Warsh’s keynote remarks at the 2026 Jackson Hole Economic Policy Symposium for Aug. 28. The speech comes after the July 28-29 FOMC meeting minutes were released on Aug. 19.

The timing places monetary policy at the center of gold’s next potential move. A policy signal that points toward tighter monetary conditions would increase the opportunity cost of holding a non-yielding asset, while a more flexible stance could preserve support from lower-rate expectations.

The July CPI data show that inflation remains above the Federal Reserve’s 2% longer-run objective, with headline CPI at 3.4% and core CPI at 2.5% over the year. The upcoming PCE figures and Warsh’s comments will therefore give investors two fresh official reference points for assessing the path of U.S. monetary policy.

Central Banks Keep the Structural Demand Floor

Gold’s rally also comes against continued official-sector accumulation. The World Gold Council reported that central banks and other official institutions bought 288.9 tonnes in the second quarter, up 62% from 177.9 tonnes a year earlier and roughly five times its revised first-quarter total of 57 tonnes.

China added 20 tonnes to its official gold reserves in July, taking holdings to 2,366 tonnes and extending its purchasing streak to 21 consecutive months, according to the World Gold Council based on data from China’s State Administration of Foreign Exchange.

The broader gold market also retains investment support. The World Gold Council said global gold demand, including over-the-counter transactions, reached 1,269 tonnes in the second quarter and 2,522 tonnes in the first half of 2026, with first-half demand value reaching a record $380 billion.

Gold‘s move above $4,600 therefore arrives with several measurable supports already in place: a weaker dollar, renewed attention to Treasury yields, sustained official-sector purchases and continued investor demand. The next major test comes with the July PCE release on Aug. 26 and Warsh’s Jackson Hole remarks two days later.