Gold climbs to three-month high as dollar weakens

Highlights

Spot gold reached about $4,677 an ounce.
Gold has gained more than 15% in August.
Gold futures advanced to around $4,720.
A weaker dollar is supporting bullion demand.

Spot gold rose 0.6% to about $4,677 an ounce, while U.S. gold futures gained 0.5% to roughly $4,720. The advance has lifted bullion by more than 15% in August, putting it on course for an unusually strong monthly performance, CNBC reports. Silver followed gold higher, rising 0.4% to about $69.19 an ounce.

Treasury moves revive demand for gold

The latest advance accelerated after the U.S. Treasury increased its buybacks of longer-dated government securities. Gold has gained roughly 7% over the past week as the intervention renewed debate over federal borrowing, inflation, and the longer-term value of the dollar.

The dollar index has fallen about 0.8% this month. A weaker U.S. currency typically makes dollar-denominated bullion less expensive for overseas buyers. Treasury yields, meanwhile, have remained elevated through much of August, although the government's buyback program has helped limit their rise.

That combination has revived the debasement trade, in which investors seek alternatives to currencies and government bonds when concerns about debt and purchasing power intensify. The Treasury measures have also prompted broader questions on Wall Street about the consequences for the dollar and the credibility of U.S. debt management.

Investor participation has broadened alongside the price rally. Gold-backed exchange-traded funds added more than 28 metric tons last week, the largest increase since January. Bullion has also moved above its 200-day moving average, while options positioning shows stronger demand for exposure to further gains.

Jackson Hole becomes the next test

Attention now turns to Federal Reserve Chair Kevin Warsh and his address around the Jackson Hole symposium later this week. Investors are looking for clues about how the Fed will respond to persistent inflation and whether interest rates could remain restrictive.

A more hawkish policy message could push yields and the dollar higher, challenging gold after its rapid advance. A softer signal could reinforce expectations that the Fed will avoid additional tightening and shift attention back toward U.S. debt sustainability and currency risks.

The broader backdrop remains supportive but volatile. Gold is up more than 15% this month and about 7% over the past week, while ETF holdings are rising and the dollar is weakening. At the same time, escalating U.S. trade disputes and tensions surrounding Iran are adding another layer of demand for defensive assets.

For gold, the move toward $4,700 therefore represents more than a technical rebound. It is increasingly becoming a test of how investors assess U.S. fiscal policy, interest rates, and confidence in dollar-denominated assets.

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