Topline
The price of gold rose to a 15-week high early Monday, as analysts credit a Treasury Department decision to ramp up buybacks of long-dated government debt for a sustained late-summer rally in the precious metal's price.
Gold reached a 15-week high on Monday. (Photo by Alexander Manzyuk/Anadolu via Getty Images)
Anadolu via Getty Images
Key Facts
Gold futures rose more than 1% on Monday morning to an intraday high of $4,738.50, while spot gold rose about 1.5% to a high of $4,679, both of which are the highest levels since mid-May.
Gold has rallied after a mostly flat few months, with last week becoming the precious metal's third straight week of a price increase.
Analysts have credited last week's Treasury Department announcement that it would ramp up buybacks of long-dated government debt, which pushed gold's price upward by about 5% last week.
Analysts at Saxo Bank on Monday said gold's recent price rally has attracted “fresh technical and momentum-driven demand.â€
ActivTrades senior analyst Ricardo Evangelista told Reuters gold's price has consolidated above $4,600 with potential for future gains, though additional gains will “depend to a large extent on the U.S. dollar remaining under pressure and Treasury yields stabilizing at current levels or declining further.â€
tangent
The price of silver hardly budged on Monday, though the metal is still hovering around its highest price in about two months. Silver futures were down about 0.3% as of Monday morning, while spot silver was down about 0.1%, both around a price of $69. Silver cracked $70 for the first time since June late last week.
what to watch for
Analysts have suggested prices could be swayed by important economic indicators later this week. The personal consumption expenditures price index for July, a key measure of inflation that is influential for Federal Reserve policymaking, is due to be released on Wednesday. Analysts have said gold, which is viewed as a safe-haven asset, could rise in price if inflation increases. Fed chair Kevin Warsh is also expected to speak at the Jackson Hole Symposium on Friday, which could provide an indication of the Fed's plan for interest rates. CME Group's FedWatch tool suggests the Fed will raise interest rates later this year, showing a 73.6% chance of a rate hike by the time of the central bank's December meeting. Higher interest rates typically depress metals prices.
key background
Gold and silver rose to historic highs earlier this year, with gold peaking around $5,600 and silver hitting an all-time high of $121. The price rally was fueled by converging factors including federal interest rate cuts, President Donald Trump's tariffs, international tensions and increasing demand for metals from booming technological industries. The highs did not last, though, as metals prices crashed in late January shortly after Trump announced Warsh, who at the time was considered unlikely to cut rates, as his pick to lead the Fed. The prices of gold and silver generally declined throughout the Iran war, as rising oil prices put downward pressure on metals. Metals prices were mostly stagnant throughout the summer, with gold languishing between about $4,000 and $4,200.
further reading
Gold rebounds as bond jitters, debt fears and weaker dollar revive bullion demand (CNBC)
