Gold climbs early Friday topping a three-month high and headed for a third weekly rally on a weaker dollar after U.S. Treasury Secretary Scott Bessent said that the agency will move to ramp up buybacks of long-dated government debt.
The unexpected move is part of an effort to address the highest borrowing costs in years. The statement sent both the U.S. currency and Treasury yields lower, making gold a more attractive alternate investment. While yields mostly rebounded, the move brought concerns about government debt back to traders’ minds.
Investors also continued to speculate about a possible interest rate hike this year by the Federal Reserve as oil prices rallied on the week amid the ongoing conflict with Iran. Minutes of the last Fed policy meeting, which came out Wednesday, revealed broader support for rate increases if inflation doesn’t go down. The Fed’s favorite inflation measure, the personal consumption expenditures price index, is scheduled for release next week and will give the latest snapshot on the state of the economy.
December gold futures rose 0.6% Thursday to settle at $4,571.40 an ounce on Comex, and the front-month contract rallied 3% in the first four days of the week. Bullion rose 1.7% in July, its first monthly increase since February, after sliding 12% in June and dropping 0.8% in May. It decreased 7% in the first half of 2026 after rallying 64% last year. The December contract is currently up $72.90 (+1.59%) an ounce to $4644.30 and the DG spot price is $4590.90.
Treasury said Wednesday it would at least double the size of buybacks for longer-dated securities. Thursday Bessent said the administration will soon unveil a new fiscal initiative.
Additionally, investors are increasingly betting that the Fed will hold interest rates unchanged in September after a series of economic reports showed that inflation hasn’t ramped up as fast as had been anticipated. The Fed closely watches both inflation and labor market data when setting monetary policy. Keeping rates unchanged would likely be bullish for gold, as higher rates make gold a less attractive asset for investment.
The central bank held interest rates steady at 3.5% to 3.75% last month, but dissenters signaled growing support for a rate hike in 2026. The Fed had previously been expected to raise rates next month. Higher rates are typically bearish for gold, making the yellow metal a less attractive asset.
Almost 64% of the investors tracked by the CME FedWatch Tool now expect rates will remain unchanged at the Fed’s next policy meeting in September, with the rest betting on a 25 basis point increase. The Fed has kept interest rates unchanged this year after three previous rate cuts.
December silver futures gained 3.5% Thursday to settle at $68.88 an ounce on Comex, and the front-month contract, which rolled from September this week, increased 5.8% in the first four days of the week. The most-active contract touched a record above $115 in January. Silver slid 3.6% in July after declining 21% in June and gaining 2.5% in May. It lost 15% in the first half of 2026 after rising 141% last year. The December contract is currently up $1.528 (+2.22%) an ounce to $70.410 and the DG spot price is $69.80.
Spot palladium edged up 0.3% Thursday to $1,337.00 an ounce and is up 0.7% so far this week. Palladium added 5.8% last month after dropping 11% in June and losing 12% in May. It retreated 25% in the first half of 2026 after rising 74% last year. Currently, the DG spot price is up $15.10 an ounce to $1354.50.
Spot platinum increased 1.2% Thursday to $1,830.80 an ounce and gained 4.2% in the first four days of the week. Platinum gained 6.6% last month after tumbling 19% in June and dropping 3.2% in May. Platinum slid 23% in the first half of 2026 after increasing 122% in 2025. The DG spot price is currently up $73.70 an ounce to $1910.00.
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