Gold prices pushed higher on Friday and were set for a third consecutive weekly gain, helped by a softer dollar and a shift in US Treasury yields. Spot gold rose 0.5% to $4,540.18 an ounce by 0254 GMT, after reaching its highest level since early June in the previous session. Over the week, the metal has added 3.6%.
Dollar weakness and Treasury buybacks
The dollar was heading for a weekly loss, which makes gold, priced in dollars, cheaper for overseas buyers. A separate driver came from the US Treasury, which announced on Wednesday that it would double the size of its buybacks of longer-dated securities over the next quarter, to at least $4 billion per operation. Treasury Secretary Scott Bessent said he might further increase the government’s repurchases of Treasuries.
“We’ve seen the dollar weakening and that has supported not just gold but all precious metals, along with a big change in yields,” said Brian Lan, managing director of GoldSilver Central.
The buyback programme allows the government to buy back existing debt, which can affect yields and market liquidity.
Fed policy in focus
Two Federal Reserve officials have expressed caution about how the Treasury’s debt management changes could affect the central bank’s monetary policy stance. That uncertainty comes alongside fresh data showing the number of Americans filing new unemployment benefit claims slipped last week. The figures suggest the labour market remains stable despite a surprise drop in employment in July, leaving the Fed room to keep its focus on containing inflation.
According to the CME FedWatch Tool, traders currently price a 64% chance that the Fed will keep rates unchanged next month and a 36% chance of a hike. Higher interest rates tend to diminish gold’s appeal because the metal pays no yield.
Lan added that gold’s upward trajectory would depend on what the Fed decides next and how those decisions affect market rate expectations.
Other precious metals and geopolitics
Gold’s gains were echoed across other metals. Spot silver rose 1.3% to $68.92 an ounce, platinum climbed 2.4% to $1,872.64, and palladium added 1.3% to $1,351.28. All three were on track for weekly gains.
On geopolitics, Bessent said the United States will impose “the toughest sanctions in history” on Iran.
Key takeaways
- Spot gold traded at $4,540.18 an ounce, up 0.5% on Friday and 3.6% for the week.
- A weaker dollar and the US Treasury’s buyback plans supported precious metals.
- Traders see a 64% chance the Fed holds rates steady next month and a 36% chance of a hike.
- Silver, platinum and palladium all rose and were set for weekly gains.
Common questions
Why does a weaker dollar lift gold?
Gold is priced in US dollars. When the dollar falls, gold becomes cheaper for buyers using other currencies, which typically increases demand and supports the price.
What are US Treasury buybacks?
Treasury buybacks are purchases by the government of its own bonds. They can affect yields and market liquidity, and in this case the Treasury has doubled the size of buybacks on longer-dated securities.
Gold’s next move looks tied to the Fed’s policy path and how the Treasury’s buyback programme feeds into rate expectations. For now, the metal is heading into the weekend with its third weekly gain intact. You can follow the latest price on our live gold price page.