Gold heads for third straight weekly gain above $4,500

Gold prices edged higher on Friday, holding firmly above $4,500 an ounce and on track for a third consecutive weekly gain — a streak not seen since March — as a weaker U.S. dollar and expanded Treasury bond buybacks continued to support the precious metal.

Spot gold rose to around $4,537 per ounce by mid-morning in Asia, after hitting its highest level since early June in the previous session, according to Reuters. Prices have climbed roughly 3.6% for the week. U.S. gold futures traded near $4,594.mezha+1

Treasury Buybacks and Dollar Weakness Drive the Rally

The week's gains were sparked by a U.S. Treasury announcement that it would double buybacks of longer-dated securities to at least $4 billion per operation over the next quarter. Treasury Secretary Scott Bessent said Thursday that the government could increase purchases further, arguing that current yields "do not reflect underlying economic fundamentals".investing+1

The move pushed long-term yields lower and weighed on the dollar, which was heading for a weekly decline of more than 0.8%. Lower yields reduce the opportunity cost of holding non-interest-bearing gold, while a weaker dollar makes the metal cheaper for buyers in other currencies.investing

InvestingLive noted that Bessent's comments amount to a clear "Bessent put" in the market, reinforcing the narrative of dollar debasement alongside what it called "incoherent and disruptive policy changes" from the current administration.investinglive

Morgan Stanley Sees Path to $5,000

Morgan Stanley said Thursday that gold had reached its fourth-quarter target of $4,450 per ounce "faster than expected" and sees a path to above $5,000 in 2027, though it cautioned the journey could be volatile. Analyst Amy Gower noted that exchange-traded fund demand has revived, with 70 metric tons of inflows in July and August after 93 tons of outflows in the prior two months.finance.yahoo+1

The bank said gold "appears to be pricing the fiscal concerns behind higher yields more than the yield level itself".finance.yahoo

Fed Policy and Geopolitics in Focus

Markets currently assign about a 64% probability that the Federal Reserve holds rates steady in September and a 36% chance of a hike, according to CME FedWatch. Fed officials have flagged concerns that Treasury efforts to suppress long-term yields could ease financial conditions even as the central bank tries to contain inflation.finance.yahoo

On the geopolitical front, Bessent said the United States would impose the "toughest sanctions" in history on Iran, adding another source of safe-haven demand. Silver, platinum, and palladium also posted gains for the week.moneycontrol+1