Gold prices climbed to a more than three-month high on 21 August, putting the metal on track for its third consecutive weekly gain. Spot gold rose 2.4% to $4,623.94 an ounce, after touching $4,631.99, its highest level since 15 May. US gold futures settled 2.4% higher at $4,680.60.

Gold has gained more than 5% during the week, including its biggest single-day rise since February. The metal also moved above its 200-day moving average of around $4,513, a technical indicator that analysts view as supportive of further momentum.

“The next step is $4,700 if this momentum continues, but also I think it's been very much driven by a drop in the U.S. dollar,” said Bart Melek, global head of commodity strategy at TD Securities.

The dollar remained near its lowest level since mid-May after investors assessed the US Treasury’s plans to expand buybacks of longer-dated bonds. Goldman Sachs also pointed to stronger demand for gold call options and renewed interest in rate-sensitive gold exchange-traded funds.

For jewellery retailers and manufacturers, the price rally remains a challenge for physical demand. Reuters reported that higher prices have deterred retail gold buyers in India, while demand in China remained steady.

Silver also gained 2.3% to $69.62 an ounce, while platinum rose 2.8% to $1,878.58 and palladium gained 0.8%. All four metals were heading for weekly gains.