Key facts
- Gold held steady on Friday, on track for its third consecutive weekly gain.
- Spot gold was little changed at $4,514.23 per ounce, after reaching its highest level since early June in the previous session.
- The U.S. dollar was headed for a weekly loss, making dollar-priced commodities cheaper for holders of other currencies.
- U.S. Treasury Secretary Scott Bessent suggested further increases in government repurchases of Treasuries.
- The Treasury announced it would double the size of buybacks on longer-dated securities to at least $4 billion per operation.
- Data showed a slip in weekly U.S. unemployment claims, indicating a stable labor market.
Gold prices held steady on Friday, positioning for a third consecutive weekly gain, supported by a weakening U.S. dollar and the Treasury Department's initiatives to manage longer-term yields. Spot gold was little changed at $4,514.23 per ounce, having reached its highest level since early June in the prior session, and was up 3.2% for the week.
U.S. gold futures also steadied at $4,571.20. The dollar was on track for a weekly loss, which typically makes commodities priced in dollars more accessible to holders of other currencies.
Treasury Secretary Scott Bessent indicated on Thursday that the government might increase its repurchase of Treasuries. This follows the Treasury's announcement on Wednesday to double the size of buybacks for longer-dated securities in the upcoming quarter, aiming for at least $4 billion per operation.
Two Federal Reserve officials voiced caution regarding how these Treasury debt management changes could influence the central bank's monetary policy decisions. Recent data indicated a decrease in weekly U.S. unemployment benefit claims, suggesting labor market resilience despite a July employment dip. This stability allows the Fed to maintain its focus on inflation control.
Market expectations, according to the CME FedWatch Tool, show a 64% probability of the Federal Reserve keeping rates unchanged in September, with a 36% chance of a hike. Gold, often seen as a hedge against turmoil and inflation, can be less attractive when interest rates rise due to its nature as a non-yielding asset.
In geopolitical developments, Bessent stated the U.S. would impose stringent sanctions on Iran, suggesting this could reduce the necessity for major new military actions. Among other precious metals, spot silver was flat at $68.03 per ounce, platinum rose 0.1% to $1,846.29, and palladium steadied at $1,333.11. All three metals were also heading for weekly gains.