Gold prices hit a three-month high and are on track for a more than 5.6% gain this week, despite strong U.S. service sector business activity. Recent developments in the Middle East, coupled with a weaker dollar, have provided support for the precious metal, pushing prices above the $4,600 mark. Spot gold is currently trading at $4,622, up more than 2.3%. Strong US services sector data kept spot gold at a three-month high. The August S&P Global Services Purchasing Managers' Index (PMI) came in at 56.8, higher than the market expectation of 54 and the highest level since December 2024, far exceeding the previous month's reading of 54.6. However, the data wasn't entirely positive: the manufacturing PMI fell from 53.9 to 53.2, a five-month low. Chris Williamson, chief business economist at S&P Global Market Intelligence, stated in a statement, "US business activity is booming, with businesses reporting that third-quarter output growth hit a more than four-year high as economic expansion momentum further strengthened in August." Investors were largely unaffected by the data, with the market still digesting the US Treasury's bond buyback program. US Treasury Secretary Scott Bessant stated that the government's next phase of policy will focus more on fiscal consolidation. Bessant added that the government may further expand its bond buyback operations the day after the Treasury announced plans to double the size of its long-term bond buyback program. Meanwhile, the dollar index, which measures the dollar's performance against six major currencies, was essentially flat, trading around 98.82, but failed to suppress the upward trend of gold, a non-interest-bearing asset. US Treasury yields rose again, with the yield on the 10-year Treasury note increasing by 0.8% to 4.75%. Data released on Friday showed that the Polish central bank's gold purchases slowed to 7.8 tons in July. According to Prime Terminal data, money market pricing indicated a 60% probability that the Federal Reserve would keep interest rates unchanged at its September meeting, down from 68% the previous day; the probability of a 25 basis point rate hike remained around 40%. Spot gold technical outlook: The upward trend continues, with bulls targeting $4700. (Spot Gold Daily Chart Source: FX678) After gold bulls recovered the 200-day Simple Moving Average (SMA) at $4,514, the trend turned upward, pushing gold prices above $4,600. The Relative Strength Index (RSI) indicates that the current upward momentum remains bullish, suggesting that gold prices are likely to continue rising in the short term. The first resistance level for spot gold is the psychological level of $4,650, with an upside target of $4,700. If these two levels are broken, the next target is the May 8 high of $4,749, followed by $4,800. If gold prices fall below $4,600, the first support is the 200-day moving average at $4,514, followed by $4,500; further down, the 100-day moving average is at $4,379, followed by $4,300; below that, the next support is at the 50-day moving average at $4,164.