Gold Surges to 15-Week High Near $4,700 Amid Weaker Dollar and Treasury Bond Buybacks
Gold prices have surged to a 15-week high near $4,700 an ounce on Tuesday, fueled by a weaker US dollar and expectations that larger US Treasury bond buybacks could improve liquidity and reduce long-term yields.
The spot price of gold rose 0.6% or $25 to $4,674.75 an ounce, with silver prices also trading above the $69-an-ounce mark.
The US Treasury's plans to increase its purchases of long-dated government bonds have added support to gold prices. The department will at least double the size of its 'liquidity support' buybacks, targeting securities with 10 to 30 years left to maturity.
A weaker dollar makes gold cheaper for buyers holding other currencies, potentially boosting demand and supporting prices. Markets are now awaiting the Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, due on Wednesday.