Bloomberg Markets reports — Spot gold surged over 5% last week to $4,604, reaching a three-month high and breaking through the key resistance of the 200-day moving average, signaling a fully bullish technical outlook. The dollar came under pressure as the U.S. Treasury expanded its Treasury repurchase program, raising market concerns that this move undermines the dollar’s credibility. Coupled with heightened geopolitical tensions in the Middle East boosting safe-haven demand, nearly all Wall Street analysts are bullish. Gold is evolving from a traditional inflation hedge into a strategic asset for hedging against dollar credit risk.
CoinMarketCap APP reports — Over the past week, the global gold market experienced a remarkable rally. Spot gold surged more than 5% in just five trading days, breaking through three major psychological thresholds of $4,400, $4,500, and $4,600, ultimately closing at $4,604.53 per ounce, with an intraday high of $4,632.10 — the highest level since May 15. U.S. gold futures also rose 2.4%, closing at $4,680.60. This powerful rally marked gold’s third consecutive weekly gain, leaving nearly all Wall Street analysts bullish.
The forces pushing gold prices above $4,600 are not singular, but the convergence of three key dynamics: a critical technical breakthrough, systemic erosion of dollar credibility, and the resurgence of geopolitical risks. Behind all of this lies one central issue—a “self-rescue” maneuver by U.S. Treasury Secretary Bessent is driving global capital toward gold.
On Monday (August 24), during early Asian trading, spot gold traded sideways at a high level, currently around $4,617.50 per ounce.
The most direct catalyst for this rally in gold comes from technical factors. Last Wednesday, gold prices surged 4.35% in a single day, marking the largest single-day gain since early February. This upward move propelled gold past the closely watched 100-day moving average near 4,380 and briefly rose above the 200-day moving average, which is currently around $4,515.
For technical traders, the 200-day moving average is a critical benchmark for identifying long-term trends. A valid breakout often signals a shift in market sentiment from hesitation to conviction, triggering concentrated inflows from algorithmic trading and trend-following capital. Currently, gold has risen above all key moving averages, with a clear bullish alignment from short-term to long-term moving averages.
Bart Melek, Global Head of Commodities Strategy at TD Securities, stated directly: “Technical factors are a major reason... If this momentum continues, the next target will be $4,700.” Goldman Sachs also noted in its report that demand for gold call options has surged sharply as market interest in global macro hedging tools has reignited, “creating a mechanical price amplification effect on both upside and downside movements.”
However, technological breakthroughs are merely surface-level phenomena. What truly supports the sustained rise in gold prices is a deeper shift in macroeconomic fundamentals.
The biggest behind-the-scenes driver of this round of gold price increases is a decision made by U.S. Treasury Secretary Bessent.
Last Wednesday, the U.S. Department of the Treasury announced it would at least double the scale of repurchase operations for long-term Treasuries maturing between 10 and 30 years—from $2 billion per operation to at least $4 billion. This move aims to curb the sustained surge in long-term Treasury yields, as the 30-year U.S. Treasury yield had reached its highest level since 2007.
However, the market's response completely surprised the Treasury. After the repurchase plan was announced, long-term Treasury yields briefly declined but quickly rebounded. More seriously, the US Dollar Index fell sharply, dropping to its lowest level since mid-May and closing near 98.84. The US dollar against the euro sank to its lowest level in three months.
What’s going wrong? Marc Chandler, Chief Market Strategist at Bannockburn Global Forex, put it plainly: “Basent’s efforts to suppress U.S. yields have had little effect on Treasury yields but have weakened the dollar. The market is pushing back.”
Citigroup quickly lowered its forecast for the U.S. dollar index over the next three months from 102.12 to 98.34. Strategists warned that the Treasury’s repurchase program adds new downward pressure on the dollar through two channels: first, by lowering U.S. Treasury yields; second, by triggering deep market concerns about “financial repression” policies.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, put it more bluntly: “Simply trying to suppress borrowing costs without addressing the underlying fiscal imbalances may intensify market concerns about financial repression and currency depreciation.” He noted that even with long-term yields at historical highs, gold has still risen, “indicating that investors are moving beyond traditional opportunity cost logic and focusing instead on the sustainability of government borrowing.”
What further unsettled the market was that Bessent further indicated on Thursday that the government might continue expanding its buyback program. Rich Checkan, President of Asset Strategies International, bluntly stated: “He plans to buy old debt with new debt at least twice as fast as currently. This is highly inflationary, as he intends to increase the money supply faster than now. More dollars chasing limited gold means only one thing—higher prices.”
In fact, as the U.S. Treasury repurchase program was introduced, the U.S. government’s debt had just historically surpassed $40 trillion. Kevin Grady, President of Phoenix Futures and Options, cut to the chase: “They’re going to double their purchases... When people say, ‘We’re going to ramp up again,’ it only tells me there’s a systemic issue. When you have to intervene like this, the market ultimately must confront it.”
If a weaker dollar is the "catalyst" for gold's rise, then geopolitical risks in the Middle East are the "spark" that ignites the market.
The situation in the Strait of Hormuz remains tense. Iran’s parliamentary committee has approved a legislative proposal allowing Iran to charge fees for vessels permitted to transit the strait, covering maritime services, environmental services, fuel supply, insurance, and security-related matters. Commercial shipping through this vital global energy corridor has sharply declined—before the conflict, over 130 cargo ships passed daily; now, only a handful transit each day.
U.S. Treasury Secretary Bentsen announced a new round of "the toughest ever" economic sanctions against Iran. Iranian Foreign Minister Alirzaei responded firmly, stating that the U.S. move reveals "desperation" and that the new sanctions are also "doomed to fail." The Chief of Staff of the Pakistani Army has traveled to Tehran to mediate, while Trump is watching the situation unfold.
This "neither war nor peace" stalemate is pushing global energy prices higher. Brentcrude is nearing $94 per barrel. Rising energy prices not only intensify inflationary pressures but also directly enhance gold's appeal as an inflation hedge. When oil and gold prices move upward in tandem, a key signal is being sent—the market is pricing in both geopolitical risk premiums and expectations of currency depreciation.
After gold broke through $4,600, market sentiment underwent a qualitative shift.
The latest Kitco News gold survey shows that among the 11 Wall Street analysts who participated, 8 (73%) expect gold prices to continue rising, while the remaining 3 anticipate a consolidation of gains—no one predicted a price decline. Main Street retail investors are equally enthusiastic, with 164 out of 211 voters (78%) expecting further gains in gold prices.
This one-sided bullish sentiment stands in stark contrast to the hesitation seen during gold’s consolidation period this summer. Kevin Grady admits, “I wasn’t bullish at all this summer… but we’re now starting to see open interest rise, with new longs entering the market.”
The most representative comment comes from Adrian Day, President of Adrian Day Asset Management: "The short-term impact of U.S. Treasury Secretary Bentsen's decision to increase long-term bond buybacks will fade, but the underlying issues exposed by this 'Operation Twist' will not disappear. Bentsen's decision to try to save the bond market at the expense of the dollar is bullish for gold."
Gold is holding above $4,600, but the road ahead is not smooth.
This week, the market will face a dual test. Chairman Powell of the Federal Reserve will deliver a speech at the Jackson Hole Global Central Bank Symposium—his first public appearance since taking office in May. TD Securities warned in a report: "Dollar risks are slightly biased to the downside. Any hawkish clarification regarding credibility on inflation control may provide only limited support to the dollar. Conversely, failure to address credibility on inflation control could exert more significant downward pressure on the dollar."
Federal funds rate futures indicate a 40% market expectation of a rate hike in September, rising to 73% by December. Wosh’s remarks could become a key factor in determining the short-term direction of gold prices.
Wednesday (August 26) is the day with the highest concentration of economic data this week, with the U.S. core PCE price index, the second estimate of second-quarter GDP, and durable goods orders all set to be released at 8:30 a.m. Eastern Time.
Meanwhile, NVIDIA will announce its second-quarter earnings on August 26. As a bellwether for the AI boom, its performance will directly impact market confidence in tech stocks and risk assets. If AI-related trading shows signs of weakness, capital may flow further into safe-haven assets such as gold.
Looking back at the sharp rally in gold prices from below $4,100 to above $4,600, we see not just a technical breakout, but a profound shift in macroeconomic logic.
The erosion of dollar credibility, concerns over U.S. fiscal sustainability, rising geopolitical risks, and the ongoing trend of central banks worldwide accumulating gold—all these factors point to one conclusion: gold is evolving from a traditional inflation hedge into a strategic asset for hedging against dollar credit risk.
Saxo Bank noted that gold can continue to rise even as nominal yields increase, “indicating that fiscal and debt concerns are becoming significant drivers of demand for physical assets.” UBS is even more optimistic, forecasting that gold prices could reach $5400 over the next 12 months.
Of course, a short-term overbought signal has already emerged, and gold prices may experience a technical correction after their rapid rise. Analysts note that even if gold falls back to $4,400, holding above this support level remains a positive sign for bulls. But regardless of short-term fluctuations, the long-term narrative for gold has fundamentally changed—when the world’s largest economy begins addressing its debt crisis with balance sheet expansion and bond purchases, gold’s shine will only grow brighter.
(Spot gold daily chart, source: E-HuiTong)
At 07:36 Beijing Time, spot gold is trading at $4,618.24 per ounce.
The forces pushing gold prices above $4,600 are not singular, but the convergence of three key dynamics: a critical technical breakthrough, systemic erosion of dollar credibility, and the resurgence of geopolitical risks. Behind all of this lies one central issue—a “self-rescue” maneuver by U.S. Treasury Secretary Bessent is driving global capital toward gold.
On Monday (August 24), during early Asian trading, spot gold traded sideways at a high level, currently around $4,617.50 per ounce.
I. Technical Breakthrough: Breaks above the 100-day moving average, reaches the 200-day moving average, with all bullish signals fully activated
The most direct catalyst for this rally in gold comes from technical factors. Last Wednesday, gold prices surged 4.35% in a single day, marking the largest single-day gain since early February. This upward move propelled gold past the closely watched 100-day moving average near 4,380 and briefly rose above the 200-day moving average, which is currently around $4,515.
For technical traders, the 200-day moving average is a critical benchmark for identifying long-term trends. A valid breakout often signals a shift in market sentiment from hesitation to conviction, triggering concentrated inflows from algorithmic trading and trend-following capital. Currently, gold has risen above all key moving averages, with a clear bullish alignment from short-term to long-term moving averages.
Bart Melek, Global Head of Commodities Strategy at TD Securities, stated directly: “Technical factors are a major reason... If this momentum continues, the next target will be $4,700.” Goldman Sachs also noted in its report that demand for gold call options has surged sharply as market interest in global macro hedging tools has reignited, “creating a mechanical price amplification effect on both upside and downside movements.”
However, technological breakthroughs are merely surface-level phenomena. What truly supports the sustained rise in gold prices is a deeper shift in macroeconomic fundamentals.
II. The Dollar's Dilemma: How Besant's "Repurchase Dilemma" Undermines Dollar Confidence
The biggest behind-the-scenes driver of this round of gold price increases is a decision made by U.S. Treasury Secretary Bessent.
Last Wednesday, the U.S. Department of the Treasury announced it would at least double the scale of repurchase operations for long-term Treasuries maturing between 10 and 30 years—from $2 billion per operation to at least $4 billion. This move aims to curb the sustained surge in long-term Treasury yields, as the 30-year U.S. Treasury yield had reached its highest level since 2007.
However, the market's response completely surprised the Treasury. After the repurchase plan was announced, long-term Treasury yields briefly declined but quickly rebounded. More seriously, the US Dollar Index fell sharply, dropping to its lowest level since mid-May and closing near 98.84. The US dollar against the euro sank to its lowest level in three months.
What’s going wrong? Marc Chandler, Chief Market Strategist at Bannockburn Global Forex, put it plainly: “Basent’s efforts to suppress U.S. yields have had little effect on Treasury yields but have weakened the dollar. The market is pushing back.”
Citigroup quickly lowered its forecast for the U.S. dollar index over the next three months from 102.12 to 98.34. Strategists warned that the Treasury’s repurchase program adds new downward pressure on the dollar through two channels: first, by lowering U.S. Treasury yields; second, by triggering deep market concerns about “financial repression” policies.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, put it more bluntly: “Simply trying to suppress borrowing costs without addressing the underlying fiscal imbalances may intensify market concerns about financial repression and currency depreciation.” He noted that even with long-term yields at historical highs, gold has still risen, “indicating that investors are moving beyond traditional opportunity cost logic and focusing instead on the sustainability of government borrowing.”
What further unsettled the market was that Bessent further indicated on Thursday that the government might continue expanding its buyback program. Rich Checkan, President of Asset Strategies International, bluntly stated: “He plans to buy old debt with new debt at least twice as fast as currently. This is highly inflationary, as he intends to increase the money supply faster than now. More dollars chasing limited gold means only one thing—higher prices.”
In fact, as the U.S. Treasury repurchase program was introduced, the U.S. government’s debt had just historically surpassed $40 trillion. Kevin Grady, President of Phoenix Futures and Options, cut to the chase: “They’re going to double their purchases... When people say, ‘We’re going to ramp up again,’ it only tells me there’s a systemic issue. When you have to intervene like this, the market ultimately must confront it.”
Three: Geopolitics and Inflation: Undercurrents in the Strait of Hormuz and the Flames of Oil Prices
If a weaker dollar is the "catalyst" for gold's rise, then geopolitical risks in the Middle East are the "spark" that ignites the market.
The situation in the Strait of Hormuz remains tense. Iran’s parliamentary committee has approved a legislative proposal allowing Iran to charge fees for vessels permitted to transit the strait, covering maritime services, environmental services, fuel supply, insurance, and security-related matters. Commercial shipping through this vital global energy corridor has sharply declined—before the conflict, over 130 cargo ships passed daily; now, only a handful transit each day.
U.S. Treasury Secretary Bentsen announced a new round of "the toughest ever" economic sanctions against Iran. Iranian Foreign Minister Alirzaei responded firmly, stating that the U.S. move reveals "desperation" and that the new sanctions are also "doomed to fail." The Chief of Staff of the Pakistani Army has traveled to Tehran to mediate, while Trump is watching the situation unfold.
This "neither war nor peace" stalemate is pushing global energy prices higher. Brentcrude is nearing $94 per barrel. Rising energy prices not only intensify inflationary pressures but also directly enhance gold's appeal as an inflation hedge. When oil and gold prices move upward in tandem, a key signal is being sent—the market is pricing in both geopolitical risk premiums and expectations of currency depreciation.
Four: A Complete Shift in Market Sentiment — Wall Street Has No More Short Sellers
After gold broke through $4,600, market sentiment underwent a qualitative shift.
The latest Kitco News gold survey shows that among the 11 Wall Street analysts who participated, 8 (73%) expect gold prices to continue rising, while the remaining 3 anticipate a consolidation of gains—no one predicted a price decline. Main Street retail investors are equally enthusiastic, with 164 out of 211 voters (78%) expecting further gains in gold prices.
This one-sided bullish sentiment stands in stark contrast to the hesitation seen during gold’s consolidation period this summer. Kevin Grady admits, “I wasn’t bullish at all this summer… but we’re now starting to see open interest rise, with new longs entering the market.”
The most representative comment comes from Adrian Day, President of Adrian Day Asset Management: "The short-term impact of U.S. Treasury Secretary Bentsen's decision to increase long-term bond buybacks will fade, but the underlying issues exposed by this 'Operation Twist' will not disappear. Bentsen's decision to try to save the bond market at the expense of the dollar is bullish for gold."
Five: The Challenges Ahead—Jackson Hole Symposium, PCE, and NVIDIA Earnings
Gold is holding above $4,600, but the road ahead is not smooth.
This week, the market will face a dual test. Chairman Powell of the Federal Reserve will deliver a speech at the Jackson Hole Global Central Bank Symposium—his first public appearance since taking office in May. TD Securities warned in a report: "Dollar risks are slightly biased to the downside. Any hawkish clarification regarding credibility on inflation control may provide only limited support to the dollar. Conversely, failure to address credibility on inflation control could exert more significant downward pressure on the dollar."
Federal funds rate futures indicate a 40% market expectation of a rate hike in September, rising to 73% by December. Wosh’s remarks could become a key factor in determining the short-term direction of gold prices.
Wednesday (August 26) is the day with the highest concentration of economic data this week, with the U.S. core PCE price index, the second estimate of second-quarter GDP, and durable goods orders all set to be released at 8:30 a.m. Eastern Time.
Meanwhile, NVIDIA will announce its second-quarter earnings on August 26. As a bellwether for the AI boom, its performance will directly impact market confidence in tech stocks and risk assets. If AI-related trading shows signs of weakness, capital may flow further into safe-haven assets such as gold.
Conclusion: The long-term logic of gold is being rewritten
Looking back at the sharp rally in gold prices from below $4,100 to above $4,600, we see not just a technical breakout, but a profound shift in macroeconomic logic.
The erosion of dollar credibility, concerns over U.S. fiscal sustainability, rising geopolitical risks, and the ongoing trend of central banks worldwide accumulating gold—all these factors point to one conclusion: gold is evolving from a traditional inflation hedge into a strategic asset for hedging against dollar credit risk.
Saxo Bank noted that gold can continue to rise even as nominal yields increase, “indicating that fiscal and debt concerns are becoming significant drivers of demand for physical assets.” UBS is even more optimistic, forecasting that gold prices could reach $5400 over the next 12 months.
Of course, a short-term overbought signal has already emerged, and gold prices may experience a technical correction after their rapid rise. Analysts note that even if gold falls back to $4,400, holding above this support level remains a positive sign for bulls. But regardless of short-term fluctuations, the long-term narrative for gold has fundamentally changed—when the world’s largest economy begins addressing its debt crisis with balance sheet expansion and bond purchases, gold’s shine will only grow brighter.
(Spot gold daily chart, source: E-HuiTong)
At 07:36 Beijing Time, spot gold is trading at $4,618.24 per ounce.