The Zhitong Finance App learned that due to the aggressive intervention of the US Treasury in the bond market, expectations of the weakening of the US dollar are heating up again, and investors are turning to alternative assets one after another, driving the price of gold to the highest level in more than three months.
Spot gold rose 1.2% intraday, breaking through $4,650 an ounce, a new intraday high since mid-May. Gold prices closed higher for the third consecutive week last week, with a weekly increase of more than 5%. Earlier, the US Treasury unexpectedly announced an increase in long-term treasury bond repurchases, dragging down both yields and the US dollar.
This move to control financing costs through direct intervention has raised market concerns that US policy may weaken confidence in the US dollar and make other types of investment more attractive — this marks the return of the “currency depreciation” theme, which drove gold to record a 65% surge in 2025. The weakening of the US dollar is beneficial to commodities denominated in US dollars.
“I think based on this currency depreciation narrative, macro funding is expected to shift drastically to precious metals,” said Justin Lin, an analyst at Global X ETFs.
Even after the surprise announcement on Wednesday, US Treasury Secretary Scott Bessent further stated that he was prepared to expand the scale of repurchases of high-cost debt, and revealed that the government is about to launch a fiscal initiative to deal with the highest borrowing costs in years.
Gold ETFs tracked by Bloomberg increased their holdings by more than 28 tons last week, the biggest weekly inflow since January — a sharp rise at the time pushed the price of gold to a record high of slightly less than 5,600 US dollars per ounce. Christopher Wong, a strategist at OCBC Bank, said that capital inflows show an encouraging trend of increasing investor participation.
“There is still room for improvement in this round of gains, although some consolidation after the recent sharp rise will be more beneficial to health,” Huang pointed out, adding that the main risk in the near future is that actual yields or the US dollar will strengthen again.
Further boosting confidence in gold, billionaire Rui Dalio, founder of the Bridgewater Fund, posted on LinkedIn on Friday that investors should reduce their bond holdings and allocate up to 15% of their capital to gold to hedge against the risk of the US debt crisis.
As of press release, spot gold was reported at $4,641 per ounce, up 0.8%, and recorded an increase of 1.9% last Friday. Silver was essentially flat at $68.99 an ounce. The Bloomberg US Dollar Spot Index, which measures the trend of the US dollar, remained stable during the day after falling to a low of more than three months on the previous trading day.