Gold advances above $4,650 on US Dollar weakness, Treasury bond buyback plans

Gold prices soared above $4,650 on Wednesday amid weakening US Dollar and plans for Treasury bond buybacks. US Treasury Secretary Scott Bessent announced the potential increase in bond buybacks beyond $4 billion, following the government's decision to double longer-dated security purchases. This move lowered long-term yields, attracting gold buyers who prefer the yellow metal over interest-bearing assets.

Rising tensions between the US and Iran, which could lead to higher energy-driven inflation, might also influence Fed's decision on interest rates. While gold often serves as a hedge against inflation and currency depreciation, its appeal diminishes when interest rates remain high. Traders will be watching Fed Chair Kevin Warsh's speech at the Jackson Hole Symposium for insights on future rate hikes.

Technical analysis indicates a bullish near-term bias for gold, with the price holding above the 100-day simple moving average and the Bollinger middle band. However, the asset faces resistance at $4,725 and potential consolidation if it fails to break this barrier. Central banks are major gold holders, increasing their reserves to strengthen economies and currencies.

Gold price is influenced by various factors such as geopolitical instability, recession fears, and the strength of the US Dollar.