Gold rebounds as bond jitters, debt fears and weaker dollar revive bullion demand

Gold prices climbed Friday, putting bullion on course for a 4.7% five-day gain. Gold futures rose 1.67% to $4,647.70, while spot gold gained 1.55% to $4,588.08. Futures approached a three-month high after gold’s rebound from almost $5,600 earlier this year and its worst quarterly performance since 2013 in the three months through June. Giovanni Staunovo, commodity analyst at UBS, said globally rising debt and sustained dollar weakness supported last year’s surge. He expects renewed concerns to lift gold to $5,400 per ounce over the next 12 months. The Treasury Department said Wednesday it would at least double liquidity-support buybacks for 10- to 30-year government debt, seeking to stabilize a selloff in longer-dated Treasurys. The announcement initially lowered Treasury yields and weakened the dollar, supporting gold. The plan arrived as U.S. government debt exceeded $40 trillion for the first time. Diane Garrett, executive chairman and CEO of Hycroft Mining, said markets may view the move as a signal that debt costs and duration will shape policy. She described that as a structural support for gold, alongside central banks rotating reserves from Treasurys into bullion. The World Gold Council’s June annual Central Bank Gold Reserves Survey found that 89% of respondents expect global central-bank gold reserves to increase over the next year. A record 45% expect their own holdings to rise, while 1% expect them to decline. Theo Botoulas, CEO of Neo Energy Metals, said Treasury Secretary Scott Bessent’s announcement and Middle East tensions could increase volatility, but the structural outlook remains favorable. Annual gold consumption is almost 5,000 metric tons, while supply grows little more than 1.5% annually. Risks remain. Staunovo warned that higher oil prices from the ongoing Middle East conflict could raise inflation, delay rate cuts, support bond yields and pressure non-yielding gold. Rhona O’Connell of StoneX expects upward yield pressure from the strong U.S. economy. David Morrison of Trade Nation said gold’s 10% rally from multi-month lows since last month could prompt a pullback. However, support near $4,400 would be constructive if the dollar continues falling.