Gold Soars Near $4,658 on Weaker Dollar and Treasury Buybacks

Gold prices surged to nearly $4,658 on Monday, up almost 1.2% on the day and reaching levels last seen on May 15. The rally followed a decision by the US Treasury to increase liquidity-support buybacks of longer-dated bonds, which weakened the US Dollar Index (DXY) to a three-month low before it steadied at around 98.97.

The dollar's decline and concerns over US fiscal policy and rising government debt boosted demand for gold as a safe-haven asset. Long-term bond yields remained high, with the 30-year Treasury yield at 5.24%, its highest level in nearly two decades, making it more expensive to hold non-yielding gold.

Market participants are now focusing on upcoming US events that could influence the market's direction. The July PCE Price Index is due on Wednesday, and Federal Reserve Chair Kevin Warsh will speak at Jackson Hole on Friday. Options markets currently imply a 38% chance of a rate hike in September.