Gold heads for third straight weekly gain as dollar weakens

Gold prices advanced on Friday, August 21, positioning the precious metal for a third consecutive weekly gain as a weaker US dollar and intervention by the US Treasury in the sovereign bond market provided strong tailwinds for bullion. 

Spot gold rose 0.4% to $4,537.41 per troy ounce, bringing its cumulative weekly gain to roughly 3.6% and hovering near its strongest levels since early June. US gold futures with December delivery gained 0.5% to settle at $4,593.90 per ounce.

The downward pressure on the US dollar made bullion significantly more attractive for non-dollar investors. The market found additional momentum following the US Treasury Department's decision to expand the volume of buybacks for long-dated government debt. 

Meanwhile, market participants continued assessing the monetary policy trajectory of the Federal Reserve. According to Reuters, financial markets are currently pricing in an estimated 63% probability that the central bank will keep benchmark interest rates unchanged at its upcoming policy meeting.

Other precious metals also posted broad-based gains: spot silver advanced 1.3%, platinum rose 2%, and palladium climbed 0.8%, with all three contracts heading for positive weekly closes.

N.Tebrizli