Gold Surges as Dollar Weakens Amid Fears of U.S. Debt Crisis

Concerns over U.S. government fiscal spending have reinvigorated the 'currency depreciation trade', causing gold prices to surge and the U.S. dollar to weaken against other major currencies.

The scale of the Treasury bond buybacks announced by Bessent is negligible, but its signaling effect is strong, according to Stephen Koertman, Head of Macro at 21Shares.

Gold has closed higher for five consecutive weeks and August is poised to record its best monthly performance since 1999. In contrast, investors have been selling off the U.S. dollar, with the U.S. Dollar Index falling to a three-month low last week.

Last week, the U.S. Treasury announced it would raise the cap on its bond buyback program from $2 billion to at least $4 billion, and two senior Treasury officials revealed that the department might utilize nearly $1 trillion in its General Account to fund this initiative.