WASHINGTON: Gold has climbed to the highest in more than three months after the US Treasury’s bold intervention in the bond market revives concerns about a weaker dollar and pushes investors toward alternatives.
Bullion rose as much as 1.2% to above US$4,650 an ounce, the highest intra-day level since mid-May.
The metal capped a third weekly gain last week, advancing more than 5% after the Treasury announced a surprise ramp-up in buybacks of long-dated government debt, driving yields and the dollar lower.
The efforts to control borrowing costs through direct intervention stoked concerns that US policy could weaken faith in the dollar and make other investments more attractive, a return to the so-called debasement theme that helped drive gold’s 65% rally in 2025.
A softer greenback is a tailwind for commodities priced in the currency.
“I see scope for macro money to pivot quite heavily into precious metals on the back of this currency debasement narrative,” said Justin Lin, an analyst from Global X ETFs.
Even after the unexpected announcement, Treasury Secretary Scott Bessent went further by saying he’s prepared to expand buybacks of costlier debt.
He also flagged that the administration would unveil a fiscal initiative to address the highest borrowing costs in years.
Gold-backed exchange-traded funds tracked by Bloomberg added more than 28 tonnes last week, the most since January, when a blistering rally sent gold to a record just below US$5,600 an ounce.
The inflows show an encouraging trend of broadening investor participation, said Christopher Wong, a strategist at Oversea-Chinese Banking Corp.
“The rally has room to run, although some consolidation after the recent sharp move would be healthy,” Wong said.
“The main near-term risks are a renewed rise in real yields or the US dollar,” he added.
Further driving confidence in gold, Ray Dalio, the billionaire founder of Bridgewater Associates, said in a LinkedIn post last Friday that investors should reduce their bond holdings and put as much as 15% of their money in bullion to hedge against the risk of a US debt crisis. — Bloomberg
