Gold hits three-month high after dollar declines

Gold rose yesterday to its highest level in more than three months, on track to post weekly gains for the third consecutive time, as a support plan announced by the US Treasury Department, involving bond buybacks, negatively impacted the dollar.

Spot gold rose 2.1 percent to $4,612.17 per ounce after reaching its highest level since May 15 at $4,620.14 earlier in the session. US gold futures climbed 2.2 percent to $4,670.60. The precious metal has gained 5 percent since the start of the week, after rising on Wednesday to its highest daily level since early February.

“Bart Millic, commodities strategy director at TD Securities, said, “The main factor, of course, is the technical factor... The next target is $4,700 if this momentum continues, but I also believe this rise is largely driven by the weakening dollar.”

US Treasury Secretary Scott Bessent said on Thursday that the government may further expand its Treasury bond buyback operations, a day after the Treasury Department revealed plans to double its long-term bond buybacks. Goldman Sachs noted in a research note that “demand for gold call options has surged sharply amid renewed demand for hedges related to global policies, creating an automatic price-amplifying factor in both upward and downward directions.”

Recent price increases have led individual buyers in India to refrain from purchasing, while demand in China, the largest consumer of the yellow metal, remained stable. For other precious metals, spot silver rose 2.1 percent to $69.52 per ounce, platinum gained 2.8 percent to $1,879.79, and palladium rose 0.6 percent to $1,341.71.