Gold touches highest level since mid-May as buying momentum builds

Gold rose on Tuesday, extending a rally driven by the U.S. Treasury's recent buyback announcement, while focus shifted to key U.S. inflation data and a speech later this week by Federal Reserve Chair Kevin Warsh for clues on interest rates.

FUNDAMENTALS

Spot gold was up 0.6% at $4,676.75 per ounce, as of 0026 GMT, after hitting its highest since May 14 ‌earlier in the session. ⁠U.S. ⁠gold futures rose 0.8% to $4,734.50. * Prices rose sharply last week after the U.S. Treasury Department said ​it would double the size of liquidity support buyback operations for longer-dated notes and bonds.

The U.S. Personal Consumption Expenditures report, the Fed's preferred inflation gauge, is due on Wednesday.


Fed Chairman Warsh's debut speech at the annual Jackson Hole conference this ​week has taken on added weight as traders and ⁠analysts look ‌for guidance about the recent jump in bond yields and ​for reassurance ​of his independence from the Trump administration.

Citi raised its zero-to-three-month ⁠gold price target on Monday to $4,800 an ounce and said ​the rally still had room to run. It kept its ​six-to-12-month target at $5,000, citing an eventual easing of tensions around the Strait of Hormuz, lower real interest rates and a less hawkish Fed.

The U.S. unveiled an expansion of sanctions that it said would cut off Iran's economic lifeline but stopped short of the most punishing measures, instead putting the world on ‌notice to cease doing business with the Islamic Republic.

Elsewhere, Ghana's artisanal gold marketing agency GoldBod has not provided funds to its ​gold suppliers for ​as long as three ⁠weeks, forcing some operators to halt purchases or borrow to stay in business, five industry sources told Reuters.

Among other metals, spot silver gained 0.5% to $69.29 per ​ounce, platinum rose 0.3% to $1,880.78 and palladium firmed 0.2% to $1,359.14.

DATA/EVENTS (GMT)

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0800 Germany Ifo Climate Business New Aug

0800 Germany Ifo Curr Conditions New Aug

0800 Germany Ifo Expectations New Aug

1400 US Consumer Confidence Aug

1400 US New Home Sales-Units Jul