Gold retreats from three-month high as investors await US inflation data

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 announcement spurred currency debasement fears.

"These U.S. dollar debasement fears should see gold ​be well-supported in the coming weeks, as the Fed has not been sending a ​clear signal it is ready to fight higher inflation," TD Securities said in a note.

"However, it's ‌too ⁠early for the metal to surge to our $5,350/oz target, given the risk rates on the short term may eventually rise as crude grinds higher. "While gold is widely regarded as an inflation hedge, elevated rates can curb its appeal as it is a ​non-yielding asset.

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

On the geopolitical front, Iran promised to retaliate against expanded U.S. economic sanctions ⁠that Washington ​said would cut off Tehran's economic lifeline. Among other ​metals, spot silver fell 1.3% to $68.01 per ounce, platinum lost 1.2% to $1,853.85 and palladium slipped nearly 1% to $1,345.26.