Gold Surges Past Three-Month High on Dollar Weakness and Treasury Policy

Gold prices surged to their highest level in over three months on Monday, driven by a potent combination of technical buying and a softer U.S. dollar. The precious metal jumped 1.5% to reach $4,673.20 per ounce by mid-day trading, its highest point since May 14.

The U.S. Treasury Department's recent bond buyback support plan and policy announcements have boosted demand for gold, making it more attractive to international investors. The dollar weakness also contributed to the gains, as a weaker greenback makes dollar-denominated gold more valuable overseas.

Market sentiment turned firmly bullish after gold broke above its 200-day moving average last week, triggering technical momentum. Institutional appetite is mirroring the price action, with gold-backed ETFs recording massive inflows of 46.7 metric tons ($6.4 billion) last week, marking their strongest weekly demand surge in 10 months.

Investors are now waiting for updates from U.S. Treasury Secretary Scott Bessent regarding potential sanctions related to Iran and critical macroeconomic updates later in the week, including Wednesday's Personal Consumption Expenditure price index and Chair Kevin Warsh's debut address at the Jackson Hole Symposium on Friday.