Gold holds near three-month high as debasement trade returns
This follows the US Treasury’s bond market intervention, which revived concerns about a weaker greenback
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[SINGAPORE] Gold traded near a three-month high after the US Treasury’s bold intervention in the bond market revived concerns about a weaker US dollar and pushed investors toward alternatives.
Bullion climbed as much as 0.5 per cent to above US$4,620 an ounce in early trading, building on a third weekly gain.
The metal powered more than 5 per cent higher last week after the Treasury announced a surprise ramp-up in buybacks of long-dated government debt, driving yields and the US dollar lower.
The efforts to control borrowing costs through direct intervention stoked concerns that US policy could weaken faith in the US dollar and make other investments more attractive, a return to the so-called debasement theme that helped drive gold’s 65 per cent rally in 2025.
A softer greenback is a tailwind for commodities priced in the currency.
Even after the unexpected announcement on Wednesday (Aug 19), US Treasury Secretary Scott Bessent went further by saying he is prepared to expand buybacks of costlier debt.
He also flagged that the administration would soon unveil a fiscal initiative to address the highest borrowing costs in years.
Further driving confidence in gold, Ray Dalio, the billionaire founder of Bridgewater Associates, said in a LinkedIn post on Friday that investors should reduce their bond holdings and put as much as 15 per cent of their money in bullion to hedge against the risk of a US debt crisis.
Gold rose 0.1 per cent to US$4,608.01 an ounce at 7.10 am in Singapore, having added 1.9 per cent on Friday.
Silver was flat at US$68.97 an ounce. Platinum and palladium edged lower.
The Bloomberg Dollar Spot Index, a gauge of the US dollar, was little changed after dropping to its lowest in more than three months in the previous session. BLOOMBERG
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