Gold Surges Past $4,630 Amid US Debt Concerns and Dollar Debasement
Gold has surged past $4,630 an ounce as investors return to the currency-debasement trade. Spot gold rose about 0.8% to $4,630.09 in Asian trading, while US futures gained 0.7% to $4,685.50. The price increase comes despite hotter-than-expected US inflation and a higher probability of Federal Reserve interest rate hikes.
The Treasury's decision to at least double liquidity-support buybacks for longer-dated government bonds has intensified investor debate over US fiscal policy and the dollar's purchasing power. Analysts say demand for gold continues to benefit from the dollar-debasement trade, despite potential constraints from higher interest rates.
State Street Investment Management's Aakash Doshi told Kitco News that $5,000 gold by year-end is firmly back in play as concerns over sovereign debt return to global markets. Gold has gained roughly 15% in August, putting it on course for its strongest month in decades.