Gold Surges Past $4,600 as Dollar Weakness and Geopolitical Tensions Drive Prices Higher

Gold prices surged over 5% last week to $4,604, reaching a three-month high and breaking through the key resistance of the 200-day moving average. This technical breakthrough signals a fully bullish outlook for gold, according to analysts.

The dollar came under pressure as the U.S. Treasury expanded its repurchase program, raising market concerns that this move undermines the dollar's credibility.

U.S. Treasury Secretary Bentsen's decision to double the scale of repurchase operations has weakened the dollar, with Citigroup lowering its forecast for the U.S. dollar index over the next three months from 102.12 to 98.34.

The situation in the Strait of Hormuz remains tense, pushing global energy prices higher and intensifying inflationary pressures. This, combined with a weaker dollar, has made gold an attractive asset as both an inflation hedge and a strategic asset for hedging against dollar credit risk.