Gold Rises to 3-Month High

Gold rose to around $4,650 an ounce on Monday, extending last week’s gains and reaching its highest level since mid-May, as concerns over US debt management and fiscal sustainability persisted following the Treasury’s unexpected ramp-up in longer-dated debt buybacks. The move pushed bond yields and the dollar lower, reviving the so-called debasement trade and boosting gold’s appeal as an alternative store of value. On the geopolitical front, threatened new US sanctions on Iran are raising the risk of further disruptions to Iranian oil supplies, potentially pushing energy prices higher and limiting the scope for interest-rate cuts. Investors will now focus on July PCE inflation data and Fed Chair Warsh’s Jackson Hole speech for further clues on the US rate outlook. Meanwhile, Canada’s planned retaliatory tariffs on some US goods after trade talks collapsed add to broader economic uncertainty.

Gold climbed to over $4,600 an ounce on Friday, its highest level since mid-May, and extended weekly gains to around 5%. The rally was supported by renewed concerns over US fiscal sustainability after the Treasury unexpectedly increased its planned purchases of longer-dated government debt, pushing bond yields and the dollar lower. The intervention has raised questions about Washington’s ability to manage rising borrowing costs and reinforced demand for gold as an alternative store of value. Treasury Secretary Scott Bessent has indicated that further buybacks could follow, while the administration is preparing additional measures to address elevated financing costs. Meanwhile, rising oil prices could limit further gains by keeping inflation pressures elevated and reducing expectations for interest-rate cuts. The US campaign to intensify economic pressure on Iran has also weakened hopes for a quick reopening of the Strait of Hormuz, supporting energy prices.

Gold traded above $4,500 an ounce on Friday and was on course for a third consecutive weekly gain, as investors turned to safe-haven metals amid heightened volatility across currency and bond markets, while rising oil prices continued to underscore inflationary risks. The precious metal jumped more than 4% on Wednesday after the US Treasury Department announced plans to at least double its long-term debt buybacks in an effort to contain borrowing costs, driving Treasury yields and the dollar sharply lower. Gold held on to those gains even after Treasury yields reversed Wednesday’s decline amid concerns that the government’s efforts to rein in long-term borrowing costs may provide only a temporary solution. Meanwhile, oil prices extended their advance as the US prepares sweeping new economic sanctions against Iran. Elsewhere, gold remained supported by robust investment demand and continued central bank purchases, particularly from China.