Gold Breaks Three-Month High Amid Dollar Weakness and Treasury Support

Gold prices reached a three-month high on Friday, driven by a weak US dollar and surprise mid-week liquidity support from the US Treasury. Spot gold surged 1.5% to $4,587.23 an ounce, its highest since May 15, while US gold futures rose 1.6% to $4,645.00.

The metal has gained 5% so far this week after a significant rally on Wednesday, but declined on Thursday as bond yields increased following a selloff. The break above key moving averages is considered a bullish signal by speculators who trade on technical signals.

U.S. Treasury Secretary Scott Bessent hinted at further government buybacks of Treasuries, while two Federal Reserve officials expressed caution about the impact of these changes on monetary policy. Gold's appeal diminishes when rates rise, and recent price gains have deterred retail buyers in India, although demand remains steady in top consumer China.