Gold Holds Near Three-Month High as US Treasury Buybacks Spur Debasement Trade
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Gold traded near a three-month high on Monday after the US Treasury's surprise expansion of long-dated debt buybacks pushed the dollar lower and revived the debasement trade. Spot bullion touched $4,656.42 an ounce, its highest since May 15, while the dollar/Turkish lira rate hit a record 48.07. Ray Dalio recommended investors hold up to 15% of their portfolios in gold to hedge against a US debt crisis.
Key Facts
- Spot gold reached $4,656.42 an ounce, its highest since May 15, according to Sozcu.
- The dollar/Turkish lira rate hit an all-time high of 48.07 in Monday's morning session.
- Gold rose more than 5% last week after the US Treasury announced a surprise ramp-up in buybacks of long-dated government debt.
- Ray Dalio, founder of Bridgewater Associates, said investors should put as much as 15% of their money in bullion.
- The Bloomberg Dollar Spot Index dropped to its lowest in more than three months in the previous session.
Treasury Buyback Shock
The US Treasury announced a surprise ramp-up in buybacks of long-dated government debt, driving yields and the dollar lower. Treasury Secretary Scott Bessent said he is prepared to expand buybacks of costlier debt and flagged a forthcoming fiscal initiative to address the highest borrowing costs in years. The direct intervention in the bond market stoked concerns that US policy could weaken faith in the dollar and make alternative investments more attractive. The dollar's weakness pushed the Bloomberg Dollar Spot Index to its lowest level in more than three months in the previous session.
Market Reaction
Spot gold climbed as much as 0.5% to above $4,620 an ounce in early trading, building on a third weekly gain. Gold rose 0.1% to $4,608.01 an ounce at 7:10 a.m. in Singapore, having added 1.9% on Friday. Silver was flat at $68.97 an ounce, while platinum and palladium edged lower. The dollar/Turkish lira rate climbed to 48.07 in the morning session, an all-time high, while euro/Turkish lira traded at 56.19. Gram gold in Turkey rose to 7,196 lira at 08:05 local time, lifted by the weaker dollar and the lira's decline.
Dalio's Gold Call
Ray Dalio, the billionaire founder of Bridgewater Associates, said in a LinkedIn post Friday that investors should reduce their bond holdings and put as much as 15% of their money in bullion. Dalio framed the recommendation as a hedge against the risk of a US debt crisis. The debasement theme helped drive gold's 65% rally in 2025, according to Bloomberg.
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Gold Holds Near Three-Month High as US Treasury Buybacks Spur Debasement Trade
