Gold Hits 3-Month High Above $4,600 as U.S. Fiscal Concerns Drive Haven Demand

Gold prices extended a strong rally on Monday, climbing to a three-month high as mounting concerns over U.S. fiscal risks and government intervention in the bond market boosted the metal's safe-haven appeal.

By 7:51 AM ET, spot gold (XAU/USD) was up 1% at $4,649.63 per ounce, building on a rally that has seen prices rise over 5% in the past week. Gold futures traded 0.6% higher at $4,707.89 per ounce, according to data from Investing.com.

Treasury Intervention Fuels Rally

The primary driver behind gold's recent strength is the U.S. Treasury Department's unexpected decision to increase its purchases of long-term government bonds. This move has pushed down bond yields and weighed on the U.S. dollar, reigniting an investment thesis where investors turn to hard assets like gold amid declining confidence in fiat currencies.

Treasury Secretary Scott Bessent has indicated the government might further expand its bond buyback program, stating that a new fiscal initiative is forthcoming to lower borrowing costs. According to analysts at ANZ, the Treasury's intervention has intensified market concerns about the U.S. fiscal situation, with investors anticipating continued government pressure to suppress long-term yields.

Investor Flows and Market Backdrop

The shift in sentiment is reflected in investor behavior and a challenging macroeconomic environment. U.S. government debt recently surpassed $40 trillion, and the dollar has fallen to its lowest level in over three months, further bolstering gold's appeal.

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Key indicators of renewed interest in gold include:

• Gold-backed ETFs recorded their largest single-day inflow since September 2025.
• These ETFs have now seen net inflows for five consecutive weeks, according to ANZ data.

This shift in investor positioning reflects a broader trend of diversification away from U.S. assets amid fiscal worries, high debt levels, and policy uncertainty, the ANZ analysts noted.

Technical Outlook and Broader Tailwinds

From a technical standpoint, gold has cleared a significant hurdle by breaking above its 200-day moving average, a long-term trend indicator currently around $4,513. Traders are now eyeing the $4,700 level as the next key technical target if the upward momentum continues.

Beyond the fiscal concerns, persistent geopolitical uncertainty and robust purchasing by global central banks provide additional support for gold prices. The World Gold Council has highlighted the importance of central bank demand in a landscape of elevated geopolitical risk and inflationary pressures.