Gold Hits Three-month High On Softer Dollar Following Surprise Treasury Move

(RTTNews) - Gold prices rose sharply on Friday and were on track for a third consecutive weekly gain, supported by a weakening dollar and expectations of controlled longer-term Treasury yields.

Spot gold jumped 1.5 percent to $4,586 an ounce, rising more than 4 percent so far this week to hit a near three-month high following the U.S. Treasury's bond buyback move, which is seen as a temporary fix rather than a structural solution to rising yields. U.S. gold futures were up 1.5 percent at $4,639.39 an ounce.

The U.S. dollar was subdued and headed for a weekly loss as U.S. bond yields steadied after rebounding from lower levels on Thursday amid fears the U.S. Treasury's plan to curb borrowing costs is just a short-term fix.

The Treasury's move to boost its government debt buybacks failed to calm markets.

With the U.S. national debt doubling over the last decade to hit a record $40 trillion and Brent crude prices surging above $93 a barrel amid the impasse in talks for deal end the U.S.-Iran war, analysts say that any effect on bond yields would prove temporary.

To support market liquidity against high yields and coinciding with efforts for fiscal consolidation, Bessent on Thursday announced plans to potentially further increase the volume of government Treasury bond buybacks.

Less than 24 hours after doubling the size of debt buybacks, Bessent stated that the government's bond buyback program could be expanded beyond the $4 billion per operation ceiling and the Treasury would keep watching how conditions develop.

Market participants also watched the latest development in the Middle East amid the continuing standoff between Washington and Teran over control of the Strait of Hormuz.

Bessent announced on Thursday that Washington will impose "the toughest sanctions in history" on Iran, with full details of the sanctions expected next week.