Gold extended its rally on Monday, climbing beyond $4,650 an ounce as concerns surrounding U.S. government finances and Treasury efforts to influence longer-term borrowing costs continued to encourage demand for bullion.
At 02:42 ET (06:42 GMT), XAU/USD gained 1% to $4,650.63 an ounce, while Gold Futures advanced 0.6% to $4,706.89. XAG/USD edged 0.2% higher to $69.15 an ounce and XPT/USD rose 0.6% to $1,892.51. The US Dollar Index was also up 0.2% at 98.88.
Treasury Measures Strengthen the “debasement trade”
Gold entered the week with considerable momentum after gaining more than 5% last week, marking its third consecutive weekly advance. Monday’s move followed a 1.9% increase on Friday and kept bullion close to its strongest level in three months.
The latest phase of the rally has been linked closely to the U.S. Treasury’s unexpected decision to increase purchases of longer-maturity government securities. The intervention initially pushed bond yields and the dollar lower, strengthening demand for tangible assets as investors reassessed the longer-term purchasing power of traditional currencies.
Treasury Secretary Scott Bessent has indicated that the government could expand its buyback programme further. He also said the administration intends to introduce a fiscal initiative aimed at tackling elevated government borrowing costs.
For markets, the issue extends beyond the immediate impact on yields. Greater Treasury intervention has prompted questions over whether policymakers could increasingly seek to influence borrowing costs rather than allowing bond-market forces to determine them independently.
U.S. Fiscal Position Adds to Gold’s Appeal
ANZ analysts said Treasury intervention has intensified investor concerns about the sustainability of the U.S. fiscal position.
They noted that gold’s advance beyond $4,500 has been supported by expectations that the government will continue trying to contain longer-term yields. At the same time, pressure on the dollar has encouraged investors to increase allocations to bullion.
The fiscal backdrop has attracted greater attention after U.S. government debt exceeded $40 trillion for the first time, while the dollar recently fell to its weakest level in more than three months.
These developments have reinforced the appeal of assets perceived as alternatives to conventional currencies and government securities.
ETF Inflows Signal Broader Investor Demand
Institutional and investment demand for gold has strengthened alongside the price rally.
According to ANZ analysts, gold-backed ETFs recorded their largest single-day inflow since September 2025 and have now attracted net inflows for five consecutive weeks.
The technical backdrop has also improved. Gold has moved above its 200-day moving average around $4,513, an indicator commonly followed by traders when assessing longer-term market direction.
If the upward momentum persists, the $4,700-an-ounce region represents the next significant technical level.
Central Banks and Geopolitical Risks Add Support
Gold’s recovery is also benefiting from persistent geopolitical uncertainty, which continues to encourage demand for assets regarded as stores of value.
Bullion has moved comfortably above the $4,000 level that provided an important support zone during the previous correction. Continued central-bank purchases and renewed ETF demand have helped reinforce the move higher.
ANZ said investor positioning increasingly points towards diversification as confidence in U.S. assets is challenged by elevated government debt, fiscal uncertainty and questions surrounding the future direction of economic policy.
The World Gold Council has similarly highlighted central-bank purchases as an important pillar of gold demand while inflationary and geopolitical risks remain elevated.
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