Gold jumps more than 5% to $4,604 as analysts stay bullish ahead of Jackson Hole

Spot gold posted a powerful weekly rally, climbing more than 5% to $4,604.53 an ounce and marking a three-month high. Prices also pushed through closely watched technical levels, including a break above the 200-day moving average, reinforcing a bullish chart setup. The surge came as the US dollar weakened after the US Treasury said it would at least double the size of its buyback operations for long-dated Treasuries (10- to 30-year maturities) from $2 billion per operation to at least $4 billion. The move was designed to curb the rise in long-term yields after the 30-year yield touched its highest level since 2007, but markets interpreted it as a fresh hit to confidence in the dollar. The US Dollar Index slid to its lowest level since mid-May, closing near 98.84, while the euro rose to a three-month high against the dollar. Gold's advance was also supported by renewed safe-haven demand amid elevated geopolitical risks in the Middle East. Tensions around the Strait of Hormuz intensified after an Iranian parliamentary committee approved a proposal that would allow Iran to charge fees for vessels transiting the waterway for services including maritime support, environmental services, fuel supply, insurance and security-related matters. Shipping volumes through the corridor have reportedly dropped sharply from more than 130 cargo ships a day before the conflict to only a handful now. Brent crude has climbed toward $94 a barrel, adding to inflation concerns and reinforcing gold's appeal. In futures markets, US gold futures rose 2.4% to settle at $4,680.60. Spot gold's intraday peak reached $4,632.10, the highest level since May 15. The rally delivered gold's third straight weekly gain. Analysts pointed to three overlapping drivers: a technical breakout, growing doubts over the dollar's credibility and a revival of geopolitical risk premiums. TD Securities' Bart Melek said technical factors were a key driver and added that if momentum holds, the next target could be $4,700. Goldman Sachs noted a sharp rise in demand for gold call options as interest in macro hedges returns, which can mechanically amplify price moves. Currency strategists said the Treasury's expanded buyback program is adding pressure to the dollar through the prospect of lower yields and increased investor concern about "financial repression." Marc Chandler of Bannockburn Global Forex said the push to suppress yields has done little to keep rates down but has weakened the dollar. Citigroup cut its three-month forecast for the US Dollar Index to 98.34 from 102.12. Some market participants argue the buyback approach risks stoking inflation expectations. Rich Checkan of Asset Strategies International said accelerating purchases could expand the money supply, leaving "more dollars chasing limited gold." The policy debate is unfolding against a backdrop of US government debt having surpassed $40 trillion. Sentiment has turned decisively bullish. Kitco's latest survey showed 8 of 11 Wall Street analysts (73%) expect further gains, while the remaining 3 see consolidation; none forecast a decline. Among retail participants, 164 of 211 respondents (78%) projected higher prices. In early Asian trading on Monday (August 24), spot gold held near recent highs, around $4,617.50 an ounce. At 07:36 Beijing time, spot gold was quoted at $4,618.24. Investors are now looking to a busy week of event risk. Federal Reserve Chair Powell is due to speak at the Jackson Hole symposium, his first public appearance since taking office in May. TD Securities said dollar risks remain tilted to the downside, warning that a lack of clarity on inflation-fighting credibility could weigh further on the currency. US data releases on Wednesday (August 26) include the core PCE price index, the second estimate of second-quarter GDP and durable goods orders, all due at 8:30 a.m. Eastern. Federal funds futures imply markets see a roughly 40% chance of a rate hike in September, rising to 73% by December. Also on August 26, NVIDIA is set to report second-quarter earnings. As a bellwether for the AI trade, its results could influence risk appetite; any cooling in AI-linked momentum could prompt additional flows into safe-haven assets such as gold. Strategists say the broader narrative is shifting. Gold is increasingly being framed not only as an inflation hedge but also as a strategic hedge against dollar credit and fiscal-sustainability risks, alongside steady central-bank accumulation. Saxo Bank said gold's ability to rise even as nominal yields increase suggests fiscal and debt concerns are becoming a more important driver of demand for hard assets. UBS has forecast gold could reach $5,400 over the next 12 months. Analysts also caution that short-term overbought signals are emerging after the rapid run-up, leaving room for a technical pullback. Some said a retreat toward $4,400 would still be constructive if that level holds as support.