Spot gold rose to within striking distance of $4,700 during the Asian session on Tuesday, extending gains after the U.S. Treasury said it would double its long-term bond buyback program.
The Treasury said last week it would increase the maximum size of some buyback operations from $2 billion to at least $4 billion, with part of the roughly $950 billion Treasury General Account potentially used to finance larger purchases of longer-dated Treasuries. Such operations could reduce long-term yields, a dynamic often supportive for non-yielding assets like gold.
Geopolitical developments added further impetus. Treasury Secretary Scott Bessent said Monday the U.S. is intensifying efforts to isolate Iran from the global financial system, warning that countries conducting business with Tehran risk U.S. sanctions. Heightened tensions in the Middle East have historically fueled inflation concerns, which could reinforce expectations for a Federal Reserve rate hike at the September meeting.
FedWatch Tool data shows the probability of a September rate hike rising to 42.4% from 39% last week, reflecting increased market sensitivity to inflation risks.
Gold-backed ETFs added 18 tonnes on Thursday, the largest single-day increase since September 2025 and the fifth consecutive week of net inflows, according to industry data.
Investors are also focused on two key U.S. data points: core Personal Consumption Expenditures inflation, due Wednesday, and Fed Chair Kevin Warsh’s first public remarks as chair at the Jackson Hole Symposium on Friday.
Technically, spot gold faces resistance at $4,700, a level that must be cleared to retest the May swing high near $4,775.
