Gold maintained its position on Friday, poised for a third consecutive weekly increase, supported by a declining dollar and the U.S. Treasury Department’s initiatives to suppress longer-term yields. Spot gold remained relatively stable at $4,514.23 per ounce as of 0031, following a peak not seen since early June in the prior session. Prices increased by 3.2% over the week. U.S. gold futures remained stable at $4,571.20. The U.S. dollar was on track for a weekly decline, resulting in a reduction in prices for dollar-denominated commodities for those holding alternative currencies.
U.S. Treasury Secretary Scott Bessent indicated on Thursday that he may consider further increasing the government’s repurchases of Treasuries. The Treasury on Wednesday announced that it would double the size of buybacks on longer-dated securities over the next quarter to at least $4 billion per operation. Two officials from the Federal Reserve conveyed a sense of caution regarding the potential implications of the Treasury Department’s debt management alterations on the monetary policy decisions of the U.S. central bank.
Data indicated that the number of Americans filing claims for unemployment benefits decreased last week, implying that the labour market continues to exhibit stability despite an unexpected decline in employment in July, thereby allowing the Fed to maintain its emphasis on controlling inflation. Markets are currently reflecting a 64% probability that the Federal Reserve will maintain its current interest rates in September, while there is a 36% likelihood of an increase, as indicated by the CME FedWatch Tool. Gold is often viewed as a safeguard against economic instability and rising prices; however, elevated interest rates diminish its attractiveness as an asset that does not generate income.
On the geopolitical front, Bessent stated that the United States will impose “the toughest sanctions in history” on Iran, a move he suggested would reduce the necessity for new significant military operations. Among other metals, spot silver remained unchanged at $68.03 per ounce. Platinum increased by 1.1% to $1,846.29, whereas palladium remained stable at $1,333.11. All three metals are on track to achieve weekly gains.
