Commodities
Gold strengthens as U.S. debt faces growing strain
Gold rallied from about $4,000 to $4,600 as investors weighed U.S. fiscal credibility, Treasury yields and reserve diversification. The next critical resistance area is near $4,770.
Markets entered the week with several sources of uncertainty. The United States was seeking to intensify sanctions and economic pressure on Iran, raising concern about renewed tension around energy supplies. Oil’s response remained contained: Brent retreated after falling more than 2% in the previous session, while WTI stayed close to recent lows. Investors appeared to judge the likely effect on global supply as limited.
Inflation and the Treasury return to focus
The week’s main macroeconomic reference was the U.S. PCE release, the Federal Reserve’s preferred inflation measure. Its result could materially alter expectations for the path of interest rates.
Against this backdrop, gold had risen from about $4,000 per ounce in mid-July to around $4,600. The move appeared to reflect growing scepticism about the U.S. Treasury’s ability to stabilise the government bond market more than a broad recovery in investment demand. Heavy borrowing and rising Treasury yields were increasing concern about financing costs.
Reserve confidence supports gold’s strategic role
The Treasury’s increased purchases of long-dated debt were intended to steady the market and contain upward pressure on yields. If investors judged those measures insufficient, long-term rates could face renewed pressure. That would also raise questions about confidence in the dollar as the world’s principal reserve asset.
Fiscal concerns and geopolitical tension could encourage reserve managers to diversify towards assets less dependent on one government. China’s gold purchases were therefore an important signal: renewed or stronger buying could reinforce the trend and encourage other central banks to follow.
The $4,770 resistance zone
Gold’s next move would depend on U.S. inflation, Fed expectations, confidence in U.S. debt and the dollar, and the geopolitical outlook. The PCE release could also produce sharp short-term moves.
Technically, gold was approaching critical resistance near $4,770 per ounce. A clear and sustained break above that area could accelerate the advance and expose higher levels.
Original analysis by Miguel A. Rodriguez, dated 25 August 2026.
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