Gold climbed above $4,650 an ounce on Monday, extending a rally toward a three-month high as the U.S. Treasury's move to buy more long-dated debt pressured yields and the dollar. Fiscal concerns tied to the government's $40 trillion debt load and a surge in ETF inflows are reinforcing demand for bullion.
Treasury buybacks revive the debasement trade
At 02:42 ET, XAU/USD rose 1% to $4,650.63 an ounce while Gold Futures gained 0.6% to $4,706.89. Silver added 0.2% to $69.15 an ounce, platinum rose 0.6% to $1,892.51, and the US Dollar Index gained 0.1% to 98.88.
The metal has extended a powerful run, gaining more than 5% last week for its third straight weekly advance. It briefly traded above $4,620 on Monday, building on Friday's 1.9% gain. The latest leg higher tracks the U.S. Treasury's surprise decision to ramp up purchases of longer-dated government debt, a move that pushed bond yields and the dollar lower. As a result, investors have returned to a trade that favors hard assets when confidence in fiat currencies' long-term purchasing power fades.
Treasury Secretary Scott Bessent then indicated the buyback program could expand further and said the administration would soon unveil a fiscal initiative aimed at the high cost of government borrowing. The intervention has raised questions about whether policymakers are increasingly willing to manage borrowing costs rather than let the bond market set them freely.
Debt load and dollar weakness deepen the concern
ANZ analysts said the Treasury's intervention has also heightened concerns about the U.S. fiscal position, noting that gold's move above $4,500 was supported by expectations the government would keep trying to control long-term yields, while dollar pressure encouraged investors to add bullion exposure. The backdrop has grown more striking now that U.S. government debt has crossed $40 trillion for the first time, while the dollar has fallen to its lowest level in more than three months.
ETF inflows and technicals point higher
Investor appetite has broadened alongside the rally. According to ANZ analysts, gold-backed ETFs recorded their largest single-day inflow since September 2025 and extended their streak of net inflows to five consecutive weeks. Technically, gold has moved above its 200-day moving average around $4,513, a level traders often watch as a sign that a longer-term trend has turned more positive, with the next major target near $4,700 if momentum continues.
Geopolitical uncertainty continues to support demand for stores of value, and gold has moved well beyond the $4,000 level that served as support during its earlier correction. ANZ said the shift in positioning reflects a broader move toward diversification as fiscal concerns and elevated debt test confidence in U.S. assets. The World Gold Council has pointed to central-bank demand as geopolitical and inflation risks stay elevated.
Source: Investing.com
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