Gold Prices Hold Near Three-Month High as Treasury Debt Buybacks Weaken Dollar

Gold prices held near a three-month high on Monday, extending a powerful rally that saw the metal gain over 5% last week. The move is primarily driven by the U.S. Treasury's decision to increase its purchases of longer-dated government debt, which has weakened the dollar and renewed investor demand for bullion as a store of value.

As of 21:52 ET (01:52 GMT), spot gold (XAU/USD) was trading up 0.5% at $4,627.69 an ounce, while gold futures were up 0.1% at $4,683.85.

Treasury Intervention Fuels Demand

The key catalyst for gold's recent strength is the U.S. Treasury's surprise move to ramp up its buyback program for longer-term bonds. This action has pushed bond yields lower and pressured the U.S. dollar, which fell to its lowest level in more than three months. The intervention has revived concerns among investors about the long-term purchasing power of fiat currencies and the sustainability of the U.S. fiscal position.

Treasury Secretary Scott Bessent has indicated the government could expand the buyback program further, adding to market speculation. According to analysts at ANZ, the Treasury's actions have heightened concerns about the U.S. fiscal situation, particularly after the national debt recently surpassed $40 trillion for the first time.

Investor Flows and Technical Picture

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Investor appetite for gold has strengthened in response to these developments. Gold-backed exchange-traded funds (ETFs) recorded their largest single-day inflow since September 2025 and have now seen five consecutive weeks of net inflows, according to ANZ data. This signals a broader shift by investors to diversify away from U.S. assets amid fiscal uncertainty.

The technical outlook for gold has also improved. The price has decisively moved above its 200-day moving average, a key long-term trend indicator, which was around $4,513. Traders are now watching the $4,700 level as the next potential technical target if the upward momentum continues.

Broader Market Context

Beyond the Treasury's actions, persistent geopolitical uncertainty and steady purchasing from central banks continue to provide a supportive backdrop for gold. The World Gold Council has highlighted the importance of central bank demand as a key pillar of support for the market, as institutions seek to hedge against inflation and geopolitical risks. This combination of factors has reinforced gold's recovery and its appeal as a safe-haven asset.