Gold Soars Above $4,600 on US Treasury Buyback Plans
Gold prices have surged above $4,600 as US Treasury Secretary Scott Bessent indicated that the government could increase bond buybacks beyond $4 billion. This move has cooled down Treasury yields and dragged the US Dollar lower, making gold cheaper for foreign buyers. Gold is often used as a hedge against inflation and currency devaluation.
The precious metal climbed to its highest level since May 15, with Bart Melek, global head of commodity strategy at TD Securities, attributing the gains to technical factors and the drop in the US Dollar. However, energy-driven inflation concerns and potential Federal Reserve rate hikes could cap gold's upside.
Iranian Foreign Minister Abbas Araghchi dismissed the threat of new US economic sanctions as a 'desperate' ploy, saying they would fail to defeat Tehran. The signal from the Treasury looking to support the longer end may offer enough support for gold and other precious metals, according to TD Securities.