Bessent's Debt Plan Fuels Gold Rally Amid Dollar Weakness
Investors betting on higher gold prices are turning to exotic options and spreads after US Treasury Secretary Scott Bessent's plan to boost purchases of outstanding debt put downward pressure on the dollar. The move has lifted both spot gold and its digital proxy, Bitcoin, with spot gold up 10% in August.
The largest monthly gain for spot gold since January puts it on track for a significant recovery despite Friday's retreat following Federal Reserve Chief Kevin Warsh's pledge to combat inflation.
Gold bulls are finding ways to bet on higher prices amid the Treasury Department's efforts to keep US borrowing costs in check. The plan includes at least doubling purchases of 10- to 30-year debt, which has put pressure on the dollar and lifted gold prices.