Gold nears three-month high due to dollar weakness and Treasury bond buybacks
Gold prices edged lower Tuesday but remained close to their highest level since mid-May, driven by a weaker U.S. dollar and the U.S. Treasury's plans for bond buybacks. Spot gold dipped slightly to $4,647.05 per ounce while futures rose marginally toward a three-month high of around $4,694.50. A softer dollar has made gold more attractive in foreign markets, and lower Treasury yields have reduced the cost of holding bullion. The U.S. dollar index is down 0.8% this month, while Treasury yields remain elevated but are being tempered by government bond buybacks that kept them from rising further. Market attention now turns to Federal Reserve Chair Jerome Warsh's upcoming speech at the Jackson Hole Symposium for clues on future interest rate policy. A dovish stance could boost gold prices as it may signal reduced Fed rate hikes and renewed concerns over U.S. debt sustainability, according to Citi analysts.
Topics: Fed policy gold inflation data U.S. dollar