Gold Hits Three-Month High as It Breaks Above Its 200-Day Moving Average

Gold climbed to a more than three-month high as the U.S. Treasury's bond buyback support plan weakened the U.S. dollar, while gold's break above key technical levels attracted additional momentum-driven buying.

The U.S. dollar remained near its lowest level since mid-May as investors questioned whether the Treasury's efforts to support the bond market could undermine confidence in the currency. Treasury Secretary Scott Bessent also indicated that the government could expand Treasury buybacks further after the department announced plans to double purchases of longer-dated securities.

Investor positioning has also contributed to the rally. Goldman Sachs noted that demand for gold call options has risen sharply, reflecting renewed interest in gold as a hedge against global macroeconomic and policy risks. Weaker expectations for further U.S. rate hikes following the Federal Reserve's July pause and softer economic data have also revived speculative interest in COMEX gold and demand for rate-sensitive gold ETFs.

Physical demand, however, remained more mixed. The recent rise in gold prices discouraged retail buyers in India, while demand in China remained steady. Poland's central bank also slowed its gold purchases to 7.8 metric tons in July.

Gold received a significant boost from its break above the 200-day moving average of approximately $4,513. The metal is now trading above all major moving averages, strengthening the technical outlook and reinforcing upward momentum.

With gold already gaining more than 5% this week, the metal is on track for its third consecutive weekly gain. TD Securities identified $4,700 as the next potential technical target if the current momentum continues.