Gold reached its highest price in three months this week, climbing past $4,600 an ounce and approaching $4,650 in futures trading. The 5% weekly gain was driven by renewed concerns over a weakening dollar following the U.S. Treasury's announcement regarding bond buybacks.
Spot gold traded between $4,580 and $4,600 throughout the week. Saxo Bank commodity strategist Ole Hansen noted that gold gained 1.8% in a single day and 5.1% for the week, identifying the move above its 200-day moving average as a technical trigger for momentum buying. Analysts highlighted $4,770 as the next resistance level.
Treasury Buyback Program and Dollar Impact
The market movement followed an announcement by the U.S. Treasury on August 19 stating it would double its long-term bond buyback operations from September 9 through November 4. The decision came after the 30-year Treasury yield spiked to a 19-year high of 5.337%.
While the buyback plan reduced yields to 5.198%, it impacted the U.S. dollar index, sending it down to 98.723 on August 19, its lowest level since May 14. Market analysts pointed out that expanding buybacks shifts government borrowing toward short-term bills, a trade-off that markets interpreted as dollar-negative.
Reactions Across Financial Markets
The policy shift drew varied responses from market commentators. Author Robert Kiyosaki described the expanded buybacks as quantitative easing and recommended alternative assets including bitcoin, gold, silver, and real estate, though analysts noted the Treasury funds buybacks from debt-sale proceeds rather than injecting new central-bank money.
Meanwhile, bitcoin also experienced upward movement, trading near $78,000 to $79,000 and participating in the broader dollar-weakness narrative. However, debate remains among market observers regarding bitcoin's status compared to traditional safe-haven assets like gold and silver.
