Gold Surges 5% to $4,603 on Dollar Weakness and Bond Market Shifts

Gold prices closed last week at $4,603 per ounce, marking their third consecutive weekly gain and rising about 5 percent from the previous week's close of $4,377. The increase was driven by continued weakness in the US dollar and stronger demand for gold as a hedge against economic, financial, and geopolitical risks.

The Kuwait-based Dar Al-Sabaek Company reported that notable developments in US bond markets contributed to gold's strong performance. After the US Treasury Department announced an expansion of its buyback operations for long-term government debt, each operation rose to at least $4 billion. This move aimed to support liquidity in the long-term bond market and reduce disruptions stemming from higher borrowing costs.

The report noted that interest-rate expectations remain a key driver of gold prices, as higher rates increase the opportunity cost of holding non-yielding metal. US Treasury yields initially declined after the buyback announcement but later recovered part of their losses. Despite this, gold continued to advance, indicating that demand is driven not only by interest rates and bond yields but also by concerns over US debt, fiscal policy, and dollar weakness.