**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% or USD 25 at USD 4,674.75 an ounce, with prices touching 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, with gold call option demand rising sharply amid renewed demand for global macro-policy hedges, creating a mechanical price amplifier to both the upside and downside. Gold prices could surge past Goldman Sachs' $4,900 year-end forecast, as surging demand for bullish gold options may amplify further gains, with the bank noting that gold continues its strong run higher, gaining 1.8% on the day and 5.1% on the week to trade at USD 4,600, well above the 200-day MA.
The Treasury Department announced earlier this month that it would at least double the size of its "liquidity support" buybacks of long-dated government bonds, with the maximum size of each operation rising from USD 2 billion to at least USD 4 billion. The larger operations are scheduled to run from September 9 through November 4, with purchases targeting securities with 10 to 30 years left to maturity. The unexpected Treasury intervention has revived concerns about rising borrowing costs and exerted downward pressure on the dollar, making gold that's priced in the currency cheaper for many buyers. Investors will also be looking for Kevin Warsh to clarify his views on how the Federal Reserve should react to stubborn inflation when the central bank chair speaks Friday at the annual Jackson Hole gathering. Market participants will closely monitor the July Personal Consumption Expenditures (PCE) price index and Fed Chair Warsh's speech for fresh clues on U.S. rate outlook. Traders are now pricing in a 67% chance that the Fed will keep rates unchanged next month and a 33% chance of a hike, as reported by The Hindu BusinessLine. The Federal Reserve's meeting minutes released this week also showed that some policymakers remained open to a rate hike this year, adding another layer of uncertainty for gold markets.
Gold-backed ETFs recorded massive inflows of 46.7 metric tons ($6.4 billion) last week, marking their strongest weekly demand surge in 10 months, according to data from the World Gold Council. In a sign of wider investor participation, bullion-backed exchange-traded funds tracked by Bloomberg added more than 28 tons last week, the most since January. North American and European funds spearheaded the wave of buying, demonstrating strong institutional appetite for the precious metal. Market sentiment turned firmly bullish after gold broke above its 200-day moving average last week, triggering technical momentum. Bond yields have also stabilized and dipped slightly, providing a strong tailwind for non-yielding bullion. The rally is also being supported by growing concerns over the U.S. fiscal outlook, with national debt now above $40 trillion, investors are increasingly looking towards assets such as gold as a hedge against currency debasement and the erosion of purchasing power.
The broader metals market followed gold's lead with significant gains across precious metals. Gold climbed 0.5% to $4,676.92 an ounce at 7:45 a.m. Singapore time, with silver rising 0.9% to $69.53, platinum and palladium also advancing. In the domestic market, gold and silver futures were not trading on the Multi Commodity Exchange (MCX) at the time of writing, with gold futures settled at Rs 1,63,100 per 10 grams and silver futures closed at Rs 2,44,063 per kg in the previous session. Gold rates in India have continued to rally in the past five days to breach above the ₹1.63 lakh mark in 10 grams. On August 24, 2026, 24-carat gold price surged by ₹8,800 in 100 grams to ₹16,39,700 and 10 grams climbed by ₹880 to ₹1,63,970. 22-carat gold rate jumped by ₹8,000 to ₹15,03,000 per 100 grams and is up by ₹800 to ₹1,50,300 per 10 grams. At current rates, 24-carat, 22-carat and 18-carat gold prices are up by 14% in India in August so far, which is the best monthly performance since January 2026.
Bank of America's latest Global Fund Manager Survey showed a net 16% of managers now view gold as undervalued, the highest reading since March 2023 and up sharply from just 6% in July, according to TradingView. George Efstathopoulos, a portfolio manager at Fidelity Holdings Ltd., told Bloomberg News on Monday that he's doubled his fund's bullion holdings over the past three weeks, citing uncertainty over Fed policy as a catalyst. Economist Mohamed El-Erian noted that gold ranked among the morning's standout performers, topping $4,600 alongside Bitcoin's rebound above $79,000. Longtime gold advocate Peter Schiff pointed to the precious metal's rally as evidence that the Federal Reserve has lost credibility on its inflation target. Christopher Wood in his Greed and Fear report said investors should once again begin accumulating gold and gold mining stocks after an extended pause, drawing parallels with the dot-com bust scenario. Tim Waterer, chief market analyst at KCM Trade, noted that gold is looking spritly to start the week and has stepped back into bid mode, taking its cues primarily from the softer dollar and focusing more on what higher yields may be signaling about underlying economic strains and policy uncertainty.
