Gold futures rose to a 14-month high last week as the U.S. dollar weakened sharply, extending a parabolic uptrend that began in late August. The metal settled at $4,662 on Friday, up 5.2% for the week and marking its third-best weekly performance of 2024, according to analysis from The Gold Update.
The rally accelerated following remarks by U.S. Treasury Secretary Scott Bessent on Wednesday, when he announced plans to repurchase longer-term U.S. debt in favor of shorter-duration securities. The announcement, made at 12:30 GMT, triggered an intraday surge of as much as $159, or 3.6%, in gold prices. The metal had already gained $61 earlier in the session, underscoring the dollar’s broader decline.
The analysis noted that gold’s rapid ascent—covering 44% of the projected distance to a conservative target of $4,959 within a single week—raises questions about sustainability. The yellow metal’s price has deviated sharply from its BEGOS Market Value of $4,167, a gap last observed during the six-day span ending January 22, when gold reached an all-time intraday high of $5,586. While the uptrend remains intact, the analysis cautioned that such deviations often precede pullbacks.
Dollar weakness was the primary driver, with the greenback recording its fourth-worst weekly percentage loss of the year. The euro, yen, and Swiss franc all posted weekly gains, with the franc up 22.6%—its best performance since March 1, 2024. Bitcoin also benefited, breaking above a key Fibonacci support zone as non-dollar liquidity pools absorbed the shift in global capital flows.
Fundamentally, the analysis highlighted that a positive U.S. yield curve, which has shifted from negative to positive in recent years, reduces the attractiveness of Treasuries and indirectly supports gold as an alternative store of value. However, upcoming economic data may test the metal’s momentum. The Economic Barometer’s July metrics, including the Fed-preferred core Personal Consumption Expenditures (PCE) index, are expected to show increases of 0.1% to 0.2% over June, potentially weighing on gold if interpreted as hawkish.
Geopolitical risks, including escalating tensions between the U.S. and Iran, could also reintroduce demand for the dollar as a safe haven, traditionally a headwind for gold. The analysis emphasized that while the current parabolic trend is unlikely to reverse abruptly, down weeks within the uptrend are not uncommon—citing the previous 14-week parabolic move, which included five down weeks.
Silver and palladium also participated in the rally, though less aggressively than gold. Silver reached $69.01, up 16.9% from its June 30 close, while palladium’s volume-dominant support level was identified at $4,547. The analysis attributed silver’s gains to a similar technical breakout, with its "Baby Blues" buy signal triggering at $59.05 on June 30.
Despite the strong performance in precious metals, broader equity markets faced valuation headwinds. The S&P 500’s trailing price-to-earnings ratio stands at 43.1x, 70% above its January 2013 level of 25.4x, while the index’s dividend yield remains at just 1.09%. The analysis noted that such stretched valuations historically precede corrections, though no immediate catalyst was identified.
