Spot gold traded around $4,650 per ounce on Monday, August 25, supported by a softer US dollar and heightened safe-haven demand, with silver also moving higher in tandem. Analysts at GTCFX note that the precious metals complex has sustained its post-breakout strength, yet longer-dated Treasury yields remain elevated, suggesting the rally is not driven by interest rate factors alone.

The latest composite purchasing managers' index climbed to 56.0, with both the services and manufacturing sectors staying in expansion territory. GTCFX highlights that the combination of economic resilience and easing inflation expectations has made market participants more cautious in their rate path assumptions, meaning the dollar, yields, and capital flows will continue to jointly influence gold prices.

On the technical side, gold is currently testing its prior resistance zone, while silver is consolidating at higher levels. Upcoming data releases, including personal consumption expenditures prices, durable goods orders, and revised economic growth figures, could help markets reassess real interest rates and the carry costs associated with holding precious metals. After the recent sharp gains, volatility risks may also escalate.

GTCFX expects that whether the data confirms continued disinflation will be the key determinant of whether gold solidifies its breakout or shifts into range-bound consolidation. Investors are advised to keep a close watch on the interplay between the US dollar and the bond market in the sessions ahead.