1 week ago
Gold Climbs Above $4,600 as Dollar Debasement Fears Grow
Gold prices went up to their highest level since mid-May.
Investors bought more gold because they were worried that the U.S. dollar could lose value.
Those worries grew after the U.S. Treasury increased support for government bond markets through buybacks.
Gold is often used as a way to protect money from inflation.
However, high interest rates can make gold less attractive because gold does not pay interest.
Investors are waiting for an important U.S. inflation report on Wednesday.
They will also listen to Federal Reserve Chair Kevin Warsh speak at the Jackson Hole conference.
Other precious metals rose too, and tensions involving Iran created more uncertainty.
Spot gold rose 0.4% to $4,668.19 an ounce after reaching its highest level since May 14.
U.S. gold futures gained 0.6% to $4,724.50, extending gold’s recent rally.
Treasury buybacks of longer-dated debt revived concerns about dollar debasement and supported demand for gold.
Investors are awaiting U.S. inflation data and Federal Reserve Chair Kevin Warsh’s Jackson Hole speech.
Silver, platinum and palladium also rose, while geopolitical tensions involving Iran added to market uncertainty.
- Who
- Investors, the U.S. Treasury, Federal Reserve officials and precious-metals traders are involved.
- What
- Gold prices rose above $4,600, reaching their highest level since mid-May.
- Where
- The trading occurred in global precious-metals markets, with investors focused on U.S. economic and monetary policy.
- When
- The rise was reported on Tuesday; U.S. inflation data is due Wednesday and the Jackson Hole speech is expected later this week.
- Why
- Buying was supported by dollar-debasement concerns, Treasury debt buybacks, inflation risks and geopolitical uncertainty.
Bullish gold case
Factors limiting gold’s rise
Dollar and inflation outlook
Bullish gold case
Analysts said concerns about U.S. dollar debasement, inflation and geopolitical uncertainty could keep gold well supported, with buying likely on price dips.
Factors limiting gold’s rise
Higher interest rates can reduce demand for gold because bullion does not generate interest income, while the Federal Reserve has not clearly indicated how aggressively it will counter higher inflation.
Key facts
- Spot gold
- $4,668.19 an ounce, up 0.4% at 0146 GMT
- U.S. gold futures
- $4,724.50, up 0.6%
- Recent peak
- Highest spot-gold level since May 14
- Potential resistance
- Analyst Tony Sycamore identified levels around $4,900 to $5,000
- Upcoming data
- The U.S. Personal Consumption Expenditures price index is due Wednesday
- Other metals
- Silver rose to $69.16, platinum to $1,883.93 and palladium to $1,359
- Geopolitical factor
- Iran vowed to retaliate after Washington expanded economic sanctions
Quotes
Tony Sycamore
IG market analyst commenting on gold’s rally and the return of the debasement trade
“Gold has continued higher”
firstpost.com
Sources
Related news
Gold Hits Three-Month High Ahead of US Inflation Data
Gold Nears Three-Month High as Traders Assess Treasury Moves
Gold Rises 12% This Month as Investors Weigh Buying Time
Gold Tops $4,600 as Investors Weigh Fed Path
Gold Falls Sharply as Fed Rate-Hike Bets Rise
Gold Extends Five-Day Gain as Oil Drop Eases Inflation Fears
Chevron Plans $7 Billion Venezuela Expansion Amid U.S. Oil Push
BFI London Film Festival Spotlights South Asian and MENA Cinema
Yair Netanyahu Evacuated From US After Significant Threat
Saudi Arabia Says Iranian Tanker Attack Killed Two Sailors
Pentagon Turmoil Deepens as Hegseth Tightens Grip on Military
