Weaker Dollar Boosts Gold to Third Straight Weekly Gain

Gold prices are set to mark their third consecutive weekly gain as a weaker US dollar and developments in the US Treasury market support demand for bullion. Spot gold was little changed at USD 4,514.23 an ounce on Friday, after touching its highest level since early June in the previous session.

The precious metal is up around 3.2 per cent for the week, with US gold futures steady at USD 4,571.20. A weaker dollar has made dollar-denominated commodities relatively cheaper for buyers holding other currencies, supporting demand for bullion.

US Treasury Secretary Scott Bessent said the government could further increase its repurchases of Treasury securities, after the Treasury announced plans to double the size of buybacks of longer-dated securities to at least USD 4 billion per operation during the next quarter. This move has added support to gold prices.

The Federal Reserve's interest-rate outlook remains in focus for investors. Markets were pricing in a 64 per cent probability of the Fed keeping rates unchanged in September, against a 36 per cent chance of a rate hike. Higher interest rates can reduce gold's relative appeal compared with interest-bearing assets.