Gold Breaks $4,525 Amid Dollar Weakness and Treasury Bond Buybacks
Gold prices have extended their weekly rally and are trading near $4,540 on Friday, with the dollar declining due to the Treasury Department's decision to expand long-dated bond buybacks.
The move is seen as a surprise by market participants, who are interpreting it as an attempt to lower yields and address concerns about the Treasury market's liquidity and rising borrowing costs.
According to Reuters, spot gold has risen around 0.5% to $4,540.18, leaving it approximately 3.6% higher on the week.
The backdrop for gold remains positive due to dollar weakness, reduced expectations of a September Fed Funds rate hike, and increased demand from central banks.
However, elevated real interest rates due to volatile long-term Treasury yields may limit price gains in the near term.