Gold has been on a tear lately, with the yellow metal surging over $1,100 in just one month. While there are many factors at play, one key driver is the opaque backdrop of the Middle East. Geopolitical tensions and trade wars have kept investors on edge, leading to a persistent macro risk premium that has benefited safe-haven assets like gold.

As we head into this week, there are several important events on the horizon that could impact gold’s trajectory. First and foremost is the release of core personal consumption expenditures (PCE), which is widely seen as a key indicator of inflation. Research suggests that a relatively high print could further fuel gold’s rally, as it would support the case for higher interest rates and a stronger macro environment.

However, the market has been hesitant to fully price in a September Fed move, leaving rates sensitive to any upside inflation surprise or shift in messaging from the upcoming Jackson Hole conference. This uncertainty has kept gold trading within a relatively narrow range of $4,500 to $5,000, with any hot data potentially triggering a retest of the 200-day moving average.

On the other hand, if cooler prints and a lack of conviction around the outcome of Jackson Hole emerge, gold could potentially trade closer to $5,000 next week. While this may seem like a stretch, it’s important to remember that gold has a long history of outperforming during times of geopolitical tension and macro uncertainty.