Gold Price Today: Gold prices rose towards the USD 4,700 mark on Tuesday, supported by a weaker US dollar and expectations that larger US Treasury bond buybacks could improve liquidity and reduce long-term yields.
As of 6:45 am, spot gold was up 0.6 per cent, or USD 25, at USD 4,674.75 an ounce. Prices touched their highest level since May 14 during the session, marking a nearly 15-week high. Spot silver also traded above the USD 69-an-ounce mark.
In the domestic market, gold and silver futures were not trading on the Multi Commodity Exchange (MCX) at the time of writing. In the previous session, gold futures settled at Rs 1,63,100 per 10 grams, while silver futures closed at Rs 2,44,063 per kg.
US Treasury bond buybacks support bullion
The US Treasury’s plans to increase its purchases of long-dated government bonds have added support to gold prices.
Earlier this month, the Treasury Department said it would at least double the size of its “liquidity support” buybacks of long-dated government bonds. The maximum size of each operation will rise from USD 2 billion to at least USD 4 billion, with purchases targeting securities with 10 to 30 years left to maturity.
The larger operations are scheduled to run from September 9 through November 4.
Higher Treasury buybacks could lower long-term yields and improve market liquidity. Lower yields can reduce the opportunity cost of holding non-yielding assets such as gold, supporting demand for bullion.
Weaker dollar boosts gold
The US dollar has also provided support to gold. The dollar index, which tracks the greenback against a basket of six major currencies, has fallen around 2.5 per cent over the past month.
A weaker dollar makes gold cheaper for buyers holding other currencies, potentially boosting demand and supporting prices.
Inflation data, Jackson Hole in focus
Markets are now awaiting the Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, due on Wednesday.
Investors will also watch Federal Reserve Chair Kevin Warsh’s debut speech at the Jackson Hole Symposium on Friday for clues about the outlook for US interest rates. The inflation data and Fed commentary could influence expectations for the central bank’s monetary policy and, in turn, the direction of gold prices.
Middle East tensions add to market focus
Investors are also monitoring developments in the Middle East, which could have implications for global inflation through their impact on oil prices.
In the latest development, US Treasury Secretary Scott Bessent said Washington was imposing new sanctions on Tehran aimed at cutting off financial support for the Iranian regime. President Donald Trump has also urged US allies to support the measures.
Any escalation in the Middle East could put upward pressure on oil prices, potentially complicating the global inflation outlook and influencing expectations for interest rates.
