Gold Price Today, August 21: Gold Holds Above $4,500 as Dollar Weakens

Key Takeaways

• Spot gold traded near $4,514 per ounce, leaving prices on course for a third consecutive weekly gain.
• Gold has risen approximately 3.2% this week, supported by a weaker US dollar and expanded Treasury bond buybacks.
• Uncertainty over Federal Reserve policy and renewed US–Iran tensions could keep gold volatile around the $4,500 level.

Gold price today holds near a two-month high

Gold prices were broadly unchanged during Friday’s Asian session after climbing to their highest level since early June.

Spot gold traded near $4,514.23 per ounce, while US gold futures stood at approximately $4,571.20. Gold was up around 3.2% for the week, putting the precious metal on track for its third straight weekly advance. Later benchmark prices placed gold near $4,528, up approximately 0.3% on the day.

The latest stabilisation follows a sharp rally earlier in the week. Gold surged more than 3% on Wednesday after the US Treasury unexpectedly announced larger repurchases of long-dated government bonds. The announcement pushed Treasury yields and the dollar lower, improving the relative appeal of non-yielding assets.

Gold briefly experienced profit-taking on Thursday, falling as low as $4,450.08, before recovering above $4,500. The rebound indicates that demand remains present despite the scale of Wednesday’s advance.

Weaker US dollar supports gold’s weekly rally

The US dollar has been one of the most important drivers behind this week’s gold rally. The dollar index traded near 98.80 on Friday and was down almost 0.9% for the week after touching a three-month low.

A weaker dollar normally makes gold less expensive for buyers using other currencies, potentially increasing international demand.

Dollar sentiment has deteriorated amid concerns about rising US government debt, persistent budget deficits and uncertainty surrounding Treasury intervention in the bond market. The US budget deficit remains above 6% of gross domestic product, while annual interest expenses are estimated at around $1.2 trillion.

These concerns have revived the “currency debasement” trade, in which investors seek scarce or tangible assets such as gold when they expect the purchasing power of fiat currencies to weaken.

However, the dollar’s decline has not been accompanied by a sustained fall in Treasury yields. After dropping sharply on Wednesday, the 10-year yield rebounded towards 4.71%, while the 30-year yield returned to approximately 5.25%.

Rising yields can limit further gold gains because they increase the opportunity cost of holding an asset that does not pay interest.

Treasury bond buybacks become a new gold catalyst

The US Treasury plans to double the size of its liquidity-support buybacks for longer-dated government securities over the next quarter, taking purchases to at least $4 billion per operation.

Treasury Secretary Scott Bessent has also indicated that the government could expand the programme further if market conditions require additional support.

Bond buybacks can improve liquidity and reduce pressure in parts of the Treasury market. When the announcement drove long-term yields lower on Wednesday, gold quickly broke above its 100-day moving average near $4,381 and moved through the psychologically important $4,500 level.

The longer-term impact is less certain. If buybacks successfully restrain real yields and weaken the dollar, they could remain supportive for gold. If investors view the intervention as evidence of deeper fiscal stress, safe-haven and currency-hedging demand could also increase.

Conversely, a renewed bond sell-off could push yields higher and create resistance for the gold price.

Federal Reserve outlook limits gold’s upside

Federal Reserve policy remains a counterweight to the bullish Treasury and dollar catalysts.

Minutes from the Fed’s July meeting showed that several policymakers were prepared to consider another interest-rate increase. Many officials believed further tightening could be required if inflation failed to move sustainably towards the 2% target.

The latest US jobless claims declined slightly, suggesting that the labour market remains relatively stable despite the unexpected fall in employment recorded in July. A resilient labour market gives the Fed more flexibility to concentrate on inflation.

Interest-rate markets currently assign approximately a 64% probability that the Fed will leave rates unchanged in September, compared with a 36% probability of an increase. Expectations of a rate cut remain limited.

This creates a mixed environment for gold. Stable rates and weaker real yields could support prices, but renewed expectations of a rate increase would probably strengthen the dollar and raise the opportunity cost of holding bullion.

US–Iran tensions add another layer of uncertainty

Geopolitical risk also remains in focus after the United States signalled that it would introduce extensive new sanctions against Iran.

The prospect of tougher sanctions has reduced expectations of a rapid diplomatic agreement and raised fresh concerns about energy flows through the Strait of Hormuz. Brent crude briefly reached a one-month high of $94.71 per barrel and remained more than 5% higher for the week.

Higher geopolitical risk can strengthen safe-haven demand for gold. However, expensive oil may also keep US inflation elevated, potentially encouraging the Federal Reserve to maintain restrictive monetary policy or consider another rate increase.

This leaves gold exposed to two competing channels: direct safe-haven demand from Middle East uncertainty and potential pressure from higher inflation-adjusted interest rates.

Gold price levels to watch

The $4,500 level is the immediate short-term pivot. Holding above this area would preserve the positive momentum created by Wednesday’s breakout.

The next resistance zone sits around $4,530–$4,570, followed by the psychological $4,600 level. A sustained move above this region would reinforce the recovery from the August lows.

On the downside, initial support can be found near Thursday’s low of $4,450. A deeper retreat could bring the 100-day moving average around $4,381 back into focus.

Other precious metals were also positioned for weekly gains. Spot silver traded around $68.03 per ounce, platinum rose to approximately $1,846, and palladium held near $1,333.