Gold Hits Three-Month High as Investors Boost Safe-Haven Demand

By Giulia Petroni

Gold prices climbed to their highest level in more than three months after the U.S. Treasury's surprise ramp-up in buybacks of long-dated government debt revived concerns over the dollar and pushed investors toward safe havens.

In early European trading, New York futures rose 0.2% to $4,687 a troy ounce after reaching $4,716.70 earlier in the session, their highest since mid-May. Prices are up more than 15% this month.

The Treasury said last week it would at least double its purchases of longer-dated government bonds in an effort to bring down long-term borrowing costs, but the move triggered a new round of dollar selling and raised concerns about the U.S. fiscal outlook. A weaker dollar makes greenback-priced bullion cheaper for holders of other currencies.

The prospect of larger Treasury buybacks has revived concerns about currency debasement, bolstering gold's appeal as a store of value. The so-called debasement trade--buying assets expected to hold their value against the weakening of the dollar and other fiat currencies--came under pressure earlier this year as the Iran war stoked inflation fears and strengthened the dollar.

Investors are now looking to key U.S. inflation data and Federal Reserve Chairman Kevin Warsh's speech at the Jackson Hole symposium later this week.

"While we're not in the throes of a crisis, the U.S. fiscal position is obviously poor," said Thomas Mathews, head of markets for Asia Pacific at Capital Economics. "Chair Warsh's previously stated views about the bond market, namely that the Fed's balance sheet could be smaller and that higher long-term yields might justify rate cuts, might be poorly received in the current market environment."

Markets have recently scaled back expectations for higher U.S. interest rates. According to CME Group's FedWatch tool, traders are now pricing a 63% probability that the Federal Reserve will leave rates unchanged at its September meeting.

Write to Giulia Petroni at giulia.petroni@wsj.com

(END) Dow Jones Newswires

August 24, 2026 05:06 ET (09:06 GMT)