Gold climbed to a three-month high on Friday as a weaker US dollar and a fresh selloff in government bonds pushed investors toward safe havens. Weekly charts show the metal nearing a double-top formation last tested in May, raising the risk of a pullback if the week closes below a key pivot level.
Gold climbed 1.31% to $4,575 an ounce on Friday afternoon, after touching $4,601 earlier in the session — its highest level since May 15.
The move tracked a slide in the US dollar and a selloff in bond markets. Government borrowing costs surged to their highest levels in decades amid growing fears over US bond market turmoil.
Anxiety about Donald Trump's handling of the economy, and concern that his war with Iran is driving up inflation, sparked the selloff in the US bond market.
Treasury buybacks fail to calm markets
The US Treasury said Wednesday it would double the size of its buybacks on longer-dated securities, sending the 30-year yield sharply lower. Treasury Secretary Scott Bessent signalled on Thursday that he could ramp up the buybacks even further.
Yet the intervention has not stopped the dollar's decline. The greenback was 0.01% down against the pound at 73.3p and 0.04% down against the euro at 85.5 cents on Friday afternoon. Ole Hansen, head of commodity strategy at Saxo Bank, said: "Gold surged again after a setback on Thursday as long-end Treasury yields climbed", adding that a Bessent interview had failed to quell investor concerns over US debt.
Double-top risk on the weekly chart
Gold futures opened Friday at $4,582.66, touched a day's high of $4,661.55 and a low of $4,565.51, before trading at $4,640.26. On the weekly chart, the metal is nearing a double-top formation at a level last tested in late May, a pattern that previously preceded a six-week slide to a low of $3,955 in the second week of July.
Should gold futures close this week below the pivotal $4,625.74 level, the analysis warns of renewed selling pressure next week. Total US debt has surpassed $40 trillion, a factor cited alongside the bond market turmoil as a driver of the current fiscal anxiety.
Sources: Business | The Guardian, Commodities Analysis & Opinion
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