Gold prices surged to between $4,636 and $4,641 per ounce on August 24, marking the highest level since mid-May 2026 amid a weakened US dollar and expanded US Treasury bond repurchase operations [1, 2, 3]. Earlier that week, spot gold approached $4,600, recording a 4.7% gain over five trading days, its strongest rally since mid-May [4, 2, 5].
The rise in gold mainly reflected the US Treasury's decision in mid-August to double the size of its buybacks of 10- to 30-year government bonds to at least $4 billion per operation, aiming to stabilize the bond market amid rising yields and fiscal concerns [6, 7, 8]. The 30-year Treasury yield briefly hit 5.34% on August 18, a two-decade high, before falling somewhat but staying volatile [6, 9]. Treasury Secretary Scott Bessent announced the expanded buyback program to address market instability caused by soaring long-term yields [6, 10].
The US dollar weakened to around $1.27 per unit by August 21, down from about $1.28 earlier that week, supporting gold as an alternative investment [4, 7, 8]. OCBC’s head of wealth advisory, Chez Anbu, said gold "remains an important source of portfolio diversification and a potential hedge against geopolitical risks, policy uncertainty and fiscal concerns," especially for investors with heavily US dollar-priced assets [7].
Investor sentiment on gold has turned optimistic, with over 70% of surveyed analysts expecting further price gains in the near term, according to industry sources [4]. UBS commodity analyst Giovanni Staunovo forecast gold could rise toward $5,400 per ounce within 12 months, citing rising global debt, a weak dollar, and continued central bank purchases [11, 5]. However, some analysts warn short-term gains could face headwinds from rising oil prices, inflation worries, and higher Treasury yields increasing opportunity costs for holding gold [9, 11].
US government debt recently surpassed $40 trillion for the first time, heightening concerns over fiscal sustainability and supporting demand for gold as a safe haven [11, 12]. Meanwhile, Asian gold prices showed mixed intraday moves last week as markets weighed US fiscal and Federal Reserve policy uncertainty [9, 10]. Singapore’s Straits Times Index slid 0.95% in the week ended August 21, driven by a 13.22% drop in SATS shares after weaker quarterly results [7, 8].
Market focus now turns to upcoming US economic data, including the personal consumption expenditure (PCE) price index, and Federal Reserve Chair Kevin Warsh’s speech at the Jackson Hole symposium on August 28 for clues on future US rate policy [6, 1, 2]. Traders will "listen closely for any shift in tone on the policy path," said gold analyst Tim Waterer, noting a balanced Fed approach could keep gold's rally intact [2].
