Gold rallies to 3-month high on weaker dollar, bullish technicals

Gold climbed to a more than three-month ​high on Friday, on track for ​its third straight weekly gain, aided by a break above ​key technical levels as the U.S. Treasury's buyback support plan dragged on the dollar.

Spot gold climbed 1.6% to $4,590.51 per ounce by 10:19 a.m. EDT (1419 GMT), earlier touching $4,604.18 - its highest since May 15. ‌U.S. gold futures ⁠rose ⁠1.7% to $4,647.00.

Prices have gained about 5% so far this week, including the biggest one-day rise since early ​February on Wednesday.


The metal is also trading above all key moving averages, having broken above the ​closely watched 200-day moving average of around $4,513, a move technical analysts typically view as bullish.

"A big factor, of course, is technical... next step is $4,700 if this momentum ​continues, but also I think it's been very much ⁠driven by ‌a drop in the U.S. dollar," said Bart Melek, global head ​of commodity ​strategy at TD Securities.

The dollar languished near its lowest level ⁠since mid-May as investors questioned whether the U.S. Treasury's efforts ​to calm the bond markets might end up undermining confidence ​in the currency. [USD/]

U.S. Treasury Secretary Scott Bessent on Thursday said the government could expand Treasury buybacks further, a day after the department unveiled plans to double buybacks of longer-dated securities.

"Gold call option demand has risen sharply amid renewed demand for global macro-policy hedges, creating a mechanical price amplifier to both the upside and downside," ‌Goldman Sachs said in a note.

Goldman noted that weaker market conviction around U.S. rate hikes following the Fed's July pause and softer economic data has helped revive speculative interest ⁠in COMEX gold and demand for rate-sensitive gold ETFs, with rising and elevated call option demand likely amplifying the move. [GOL/ETF] [CFTC/]

On physical demand, the recent rally in prices deterred ​retail buyers in India, while demand in top consumer China held steady. [GOL/AS]

Poland's central bank slowed gold buying to 7.8 metric tons in July, data showed on Friday.

Elsewhere, spot silver gained nearly 2% to $69.43 per ounce, platinum climbed 3.8% to $1,897.36, while palladium rose 0.6% to $1,342.30. All metals are set for a weekly gain.