XAU/USD rallies as US Dollar weakness and $4 billion Treasury bond buyback plans pressure yields, boosting demand for bullion.
Gold prices climbed to $4,670, the highest since May 14, in early Asian trading Wednesday. The rally follows a weaker US Dollar and the US Treasury’s plan to expand bond buybacks beyond $4 billion, dragging long-term yields lower and sparking short-covering.
The move doubles earlier buyback plans for longer-dated securities, reducing the opportunity cost of holding non-yielding bullion. A softer USD also enhances gold’s appeal to foreign investors. However, rising US-Iran tensions and potential Fed rate hikes may limit further gains.
Traders await Fed Chair Kevin Warsh’s speech at the Jackson Hole Symposium for clues on interest rate policy. Hawkish remarks could weigh on gold, which struggles in high-rate environments.