Gold extended its advance on Monday, moving above $4,650 an ounce and remaining close to a three-month high as concerns over the U.S. fiscal outlook and Treasury efforts to restrain longer-term borrowing costs continued to strengthen demand for the precious metal.
At 02:42 ET (06:42 GMT), XAU/USD was up 1% at $4,650.63 an ounce, while Gold Futures gained 0.6% to $4,706.89. XAG/USD edged 0.2% higher to $69.15 an ounce and XPT/USD rose 0.6% to $1,892.51. Meanwhile, the US Dollar Index increased 0.2% to 98.88.
Treasury Action Revives the Dollar-Debasement Trade
Gold’s latest gains follow a rise of more than 5% last week, marking a third consecutive weekly advance. The metal briefly traded above $4,620 an ounce on Monday after climbing 1.9% on Friday, keeping prices around their strongest levels in three months.
The rally has gathered momentum following the U.S. Treasury’s unexpected decision to increase purchases of longer-dated government securities. The move initially pressured Treasury yields and the dollar, renewing investor interest in hard assets such as gold amid concerns about the long-term purchasing power of traditional currencies.
Treasury Secretary Scott Bessent subsequently indicated that the government could expand the buyback programme further. He also said the administration intends to announce a fiscal initiative designed to address elevated government borrowing costs.
The market’s concerns extend beyond falling yields. Increased Treasury involvement in the bond market has raised questions about whether policymakers are becoming more willing to influence borrowing costs rather than leaving them entirely to market forces.
ANZ analysts said the intervention has also intensified concerns surrounding the U.S. fiscal position. According to the bank, gold’s move above $4,500 has been supported by expectations that authorities will continue seeking to contain longer-term yields, while pressure on the dollar has encouraged investors to increase their exposure to bullion.
Those concerns have become more pronounced after U.S. government debt surpassed $40 trillion for the first time, while the dollar recently fell to its weakest level in more than three months.
Investor Demand for Gold Strengthens
Demand for bullion has broadened alongside the Treasury-driven rally. According to ANZ analysts, gold-backed exchange-traded funds recorded their largest single-day inflow since September 2025 and have now registered net inflows for five consecutive weeks.
Technical indicators have also become more supportive. Gold has moved above its 200-day moving average near $4,513, a level widely followed by traders as an indicator of the longer-term trend.
If the current momentum continues, the next important technical area sits around $4,700 an ounce.
Geopolitical uncertainty is providing another source of support as investors continue seeking assets traditionally regarded as stores of value.
Gold has moved decisively above the $4,000-an-ounce region that acted as an important support area during the previous correction. Continued central-bank purchases and renewed ETF inflows have further strengthened the recovery.
ANZ said changing investor positioning points to a broader push towards diversification as confidence in U.S. assets is tested by rising government debt, fiscal concerns and uncertainty surrounding future policy.
The World Gold Council has also highlighted central-bank buying as an important source of demand while geopolitical and inflation risks remain elevated.