The U.S. dollar index dipped on Monday, making gold more attractive to holders of other currencies. The greenback's weakness, coupled with strong inflows into bullion-backed exchange-traded funds (ETFs), has helped sustain gold near its historic highs. The dollar has dropped over 3% from its January peak, driven partly by investor skepticism over U.S. President Donald Trump's tariff threats, which have yet to fully materialize.
This week's U.S. economic calendar is packed, with key data points including the Chicago Fed National Activity Index and the Dallas Fed Manufacturing Index on Monday, followed by housing market indicators such as the S&P CoreLogic Case-Shiller National Home Price Index on Tuesday.
However, the market's primary focus will be Friday's Personal Consumption Expenditures (PCE) index, the Federal Reserve's preferred inflation measure. The PCE data could heavily influence expectations around the Fed's next move, with traders currently anticipating a rate cut in September.