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Gold rises above $4,600 as Treasury buyback plans weaken the dollar
The metal hit its highest level since May 15, helped by USD softness tied to expectations for more than $4 billion in additional bond buybacks.
Gold prices gained traction above $4,600 in early Asian trading on Monday, reaching around $4,625, according to FXStreet. The move marked the highest level since May 15 as the US Treasury buyback support plan weighed on the US dollar.
FXStreet linked the dollar and yield moves to comments by US Treasury Secretary Scott Bessent, who said the government could increase bond buybacks beyond $4 billion after the department unveiled plans to double buybacks of longer-dated securities. With gold priced in USD, a weaker currency can make the metal cheaper for foreign buyers, supporting demand.
The outlet also noted that energy driven inflation concerns tied to ongoing Middle East tensions could raise the case for future Federal Reserve rate hikes, which may limit gold’s upside. Gold does not pay interest, so higher rates typically reduce its appeal as an inflation hedge.
On technicals, FXStreet said XAU/USD held a bullish near term bias above the 100 day simple moving average and the Bollinger middle band, even as the 14 period Relative Strength Index was at 70.8, signaling overbought conditions and keeping traders focused on whether momentum can extend toward $4,700.
Latest closeGold $4,432.00 ▲1.6%