Gold Stays Near Three-Month Peak as U.S. Treasury Buyback Talk Fuels Dollar Unease

Spot gold held firm in early Asian trading on August 24, hovering around $4,607 an ounce after rallying to a three-month high last week. The move followed fresh market attention on the U.S. Treasury's bond repurchase (buyback) program. After officials signaled the scope could be expanded further, investors questioned whether stepped-up buybacks of longer-dated Treasuries could add to doubts about the U.S. dollar's standing, contributing to renewed dollar softness. Middle East risk also remained in focus ahead of expected U.S. details this week on economic sanctions targeting Iran. Iran on August 23 unveiled what it called an "oil export countermeasure," warning that if Washington launches an economic war, oil exports through the Strait of Hormuz—and even the broader Persian Gulf region—would stop. U.S. crude was recently around $86.13 a barrel. U.S. equities rose on Friday, though all three major indexes ended the week lower. The Dow gained 0.98%, the S&P 500 added 0.43% and the Nasdaq advanced 0.44% on the day, but weekly losses snapped three-week winning streaks for the S&P 500 and Nasdaq; the Dow logged a second straight weekly decline. Trading was shaped by swings in bond yields and ongoing uncertainty tied to the Middle East. Materials led sector gains, while utilities lagged. Oil prices extended their rally for a sixth consecutive session on Iran-related supply concerns, keeping inflation worries elevated. Ross Stores jumped 4.4% after raising its full-year profit outlook. Looking to the week ahead, investors are watching earnings from major tech names including NVIDIA, the July PCE inflation report, and remarks from the Federal Reserve Chair at the Jackson Hole symposium. Gold and metals Gold climbed nearly 2% on Friday, hitting $4,632.10 an ounce—its highest since May 15—and rose more than 5% for the week, marking a third straight weekly gain. The rally was underpinned by a break above the closely watched 200-day moving average near $4,513, a level widely viewed by technical traders as a bullish signal. Dollar weakness added support as debate grew over whether an expanded Treasury buyback plan could erode confidence in the currency. TD Securities said the next upside target would be $4,700 if momentum holds. Goldman Sachs pointed to renewed global macro hedging demand that has boosted bullish options interest in gold, amplifying price moves mechanically. On physical demand, retail buying in India was constrained by elevated prices, while demand in China remained steady. Other precious metals also advanced: spot silver rose 2.3%, platinum gained 2.8%, and palladium increased 0.8%, with the complex ending the week higher. Oil Crude prices finished higher on Friday after U.S. President Donald Trump threatened economic sanctions against Iran's trading partners, reinforcing expectations of tighter supply in coming weeks. Brent settled up 0.73% at $93.86 a barrel, while U.S. crude ended 0.5% higher at $86.64. For the week, Brent gained 5.93% and U.S. crude added 5.15%. Again Capital said sanctions have long been Washington's main tool to pressure Iran, and Tehran has warned of "devastating" retaliation against new threats. Empire FX argued that because Iran's exports are already heavily constrained by U.S. maritime blockades, the direct supply hit may be limited. Still, with shipping volumes through the Strait of Hormuz far below normal, the risk of maritime incidents and retaliation could intensify tensions. Price Futures Group said the market is seeking alternative supply via pipelines, U.S. shale, recovering Venezuelan output, the UAE and other sources. Ongoing production cuts by major producers continue to support prices. Neither the U.S. nor Iran has moved to restart talks since the peace agreement expired this week. Vessel-tracking data showed only seven commodity ships transited the Strait of Hormuz last Thursday, roughly half the prior day's count. FX and rates The U.S. Dollar Index ended Friday at 98.55, with the dollar sliding to a three-month low versus the euro. The decline came as concerns mounted that expanded repurchase operations for longer-dated Treasuries could further weigh on the greenback. Treasury Secretary Bessent said repurchase volumes could be increased further, after the Treasury unexpectedly pledged the prior day to at least double buybacks to curb rising yields. Analysts said the step did not meaningfully cap yields and instead pressured the dollar. Bannockburn Global Forex's chief strategist said: "The market is pushing back." The euro touched 1.1711, the highest since May 14, before closing at 1.1679. Sterling reached 1.3675, its highest since February 11. The next major test is the Federal Reserve Chair Walsh's Jackson Hole speech on Friday. TD Securities sees downside risk for the dollar and warned that failing to address concerns around the credibility of inflation-fighting could add pressure. Fed funds futures imply a 40% probability of a September rate hike and 72% by December. The yen edged up to 159.01 per dollar, supported by faster core inflation in Japan in July. Analysts said the yen could resume weakening unless the Bank of Japan tightens policy, with attention on the September 17–18 meeting. International developments Iran sanctions and Hormuz threats: After Trump described an "unprecedented" economic war against Iran, U.S. officials said detailed measures for "unprecedented economic isolation" would be released on the 24th. Iran's August 23 response included a threat to halt oil exports through the Strait of Hormuz and the wider Persian Gulf if Washington escalates. Commentary has framed the move as a high-stakes gambit amid a prolonged standoff and failed negotiations. (CCTV News) Iranian Foreign Minister: Foreign Minister Alireza阿拉格齐 said Iran has never feared U.S. sanctions and called U.S. "economic actions" a familiar bullying tactic, adding that Iran knows how to respond. (CCTV) Iranian President: President Pezeshkian said Iran is facing a "comprehensive economic, military, and security war," arguing Washington misjudged Iran's resilience. He said Iran will combine domestic mobilization and diplomacy to counter pressure, noting the Strait of Hormuz as a strategic asset and highlighting efforts such as renewable energy development to strengthen economic resilience. Iran's security chief: Supreme National Security Council Secretary Rezaei said Iran will keep the Strait effectively closed until the U.S. meets its commitments, and warned neighboring countries against joining U.S.-led "economic warfare." He said Iran and Oman have reached a "paper agreement" on a commercial route through the strait, but reopening depends on U.S. actions. Rezaei also said Iran exported 70 million barrels of oil over the past one to two months despite maritime blockades. Trump on market intervention: On August 21, Trump said he did not instruct Treasury Secretary Bentsen to intervene in the bond market this week. Asked what could be done if long-term yields rise again, he said, "The ultimate intervention is the U.S. military; if necessary, we will deploy the military." (CCTV International News) U.S.-Canada trade dispute: U.S. Trade Representative Greer said talks with Canada broke down after Canada declined to finalize an agreement and maintained retaliatory measures. A senior official said the U.S. will impose a 50% tariff on select Canadian imports under Section 338 of the Tariff Act of 1930, effective 12:01 a.m. Eastern Time on Saturday. Hormuz toll proposal: Iran's National Security and Foreign Policy Committee approved Article 3 of draft legislation allowing Iran to charge fees for vessels authorized to transit the Strait of Hormuz. Tehran said the fees would cover maritime and environmental services, fuel, insurance and security, payable in Iranian rials or other designated currencies. The proposal still requires approval by the full Parliament and review by the Guardian Council, with the Expediency Discernment Council potentially involved if disputes arise. Shipping through the strait has dropped sharply to only a handful of vessels recently, versus more than 130 daily before the conflict, raising risks of supply disruption, higher transport costs and rising insurance premiums. China developments Green computing: A report released on August 22 at the 2026 Green Computing (Artificial Intelligence) Conference in Hohhot said China's push to green its computing power supply chain is showing early results. By end-June 2026, China's intelligent computing power reached 2185 EFLOPS. By end-2025, the country had deployed more than 13.73 million standard server racks and built 42 intelligent computing clusters with more than 10,000 GPUs each, with over 80% of capacity concentrated in eight national computing hubs. More than 160 data centers have earned 4A or higher green data center certification. The report said "computing-power–electricity" coordination has moved from concept to practice and was included in the 2026 Government Work Report. In 2025, China's computing infrastructure consumed 170 billion kWh of electricity, up about 30% year over year. It also highlighted the rise of computing networks, token economies and computing power exports; by March 2026, China's average daily token calls climbed from about 100 billion in early 2024 to roughly 140 trillion. (Xinhua) Bond markets and Panda bonds: Global long-term sovereign yields have continued to rise, intensifying bond selling pressure overseas. In contrast, China's bond and FX markets have been relatively stable, and Panda bond issuance hit a record for the period. As of August 21, 2026 Panda bond issuance totaled RMB 209.975 billion, up more than 73% year over year. Industry experts said China is in a different economic and policy cycle, foreign participation in the onshore bond market remains about 5%–8%, and domestic investors still hold pricing power. They added that volatile U.S. Treasury yields could lift global return hurdles and temper near-term appetite for renminbi bonds, while the sharp rise in developed-market yields could also weigh on valuations of domestic risk assets. (CCTV Finance)