At the close of trading on 29/8, the spot price of gold rose nearly 30 USD to 3,446 USD an ounce. This is the highest level since 17/7. For the month, gold prices increased by 4.7%, the strongest gain since April.

Global gold prices rose sharply on 29/8. Chart: Kitco

The market rose as the US dollar weakened. The Dollar Index fell 2.2% this month. A weaker dollar makes gold less expensive for buyers using other currencies.

In addition, the latest data shows US consumer spending remained solid in July. However, inflation edged up slightly as import tariffs caused some items to increase in price. The Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's (Fed) preferred inflation gauge, rose 0.2% in July compared to the previous month. Year-over-year, the increase was 2.6%, in line with forecasts.

"We still expect the Fed to cut interest rates one to two times this year. This will benefit commodity prices, including gold and silver," said David Meger, Director of Metals Trading at High Ridge Futures.

Investors are currently forecasting the Fed will cut its benchmark interest rate by another 25 basis points (0.25%) at its September meeting. The probability of this action is now nearly 89%, up from 85% before the PCE report was released. Gold prices tend to rise in a low interest rate environment.

On 29/8, a US court also considered temporarily blocking President Donald Trump's dismissal of Fed Governor Lisa Cook. Cook filed a lawsuit against Trump, saying the president had no legitimate reason to remove her.

"Gold prices are also benefiting from the uncertainty at the Fed. Gold ETFs have bought nearly 15 tons in the past two days," Commerzbank commented.

In addition to gold, other precious metals also rose in price in the last trading session of the week. Silver rose 1.7% to 39.7 USD an ounce. Platinum rose 0.3%, while palladium remained almost unchanged.

Ha Thu (according to Reuters, Kitco)