Gold Rockets to Record Highs on Weak Dollar and Falling Bond Yields
Gold prices surged to record highs last week, driven by two key factors: a weaker dollar and lower bond yields. The metal's price rose by 7.39% to $4,401.40 per ounce, one of the most significant weekly gains in recent history.
The initial spark came from Washington when the US Labor Department reported a disappointing jobs number for July. Economists had expected growth, but instead non-farm payrolls fell by 23,000. This miss forced a reevaluation of Federal Reserve policy expectations, making rate cuts more likely and reducing the opportunity cost of holding gold.
The dollar index subsequently slid to around 99.8 points, making bullion cheaper for overseas buyers, while Treasury yields softened further adding support to gold's price. The combination proved potent, driving gold prices higher.