Gold Surges to Three-Month High Amid US Treasury Intervention and Trade Tensions

Gold prices have surged to a three-month high after US Treasury intervention in the bond market, coupled with growing trade and geopolitical tensions that are boosting demand for bullion.

The metal's price has added over 7% in the past four sessions, with investors taking advantage of the cheaper price point due to weaker dollar. The US Treasury's surprise decision last week to increase buybacks of longer-dated government debt has pushed bond yields lower and weakened the dollar.

Treasury Secretary Scott Bessent has stated that he is prepared to expand buybacks of longer-dated debt, and an initiative aimed at addressing high government borrowing costs will soon be unveiled. This policy shift has revived concerns about the US government's fiscal position and the potential weakening of confidence in the dollar.

Analysts point out that gold's technical backdrop has also improved sharply, with the metal now above its 200-day moving average. Tony Sycamore from IG believes that dips will attract buyers as gold targets resistance zones around $4,900-$5,000.