Gold breaks above $4,500 as dollar slide fuels 7% rally

Spot gold rose 1.69 percent to $4,594.60 an ounce Friday, extending a three-session gain of nearly 7 percent as the dollar index slipped below 99.00.

COMEX gold cleared the $4,500 area after breaking above the $4,447 support-turned-resistance level, with the U.S. dollar index trading below 99.00, according to Kitco data.

Silver rose 2.23 percent to $69.470 an ounce, moving through $66.55 and $68.02 toward the $69.48 resistance. The 10-year Treasury yield held near 4.7 percent and the 30-year near 5.25 percent, while Brent crude traded near $93.45 a barrel and WTI near $86.53.

Gold bulls target $4,595, then $4,671 and $4,778, while a break below $4,447 opens $4,320. The flash U.S. PMI release at 9:45 a.m. ET is the next macro test.

Dollar Slide and Fiscal Concerns Underpin the Breakout

The move is not simply a lower-yield trade. Metals are rallying even with long-end yields elevated, suggesting fiscal-risk hedging, dollar weakness and geopolitical demand are offsetting the negative carry from higher rates. The Trump administration's decision to expand buybacks of longer-dated U.S. government bonds to at least $4 billion per operation initially pushed long-term yields lower and weakened the dollar, though yields have since recovered part of the decline as investors question whether the policy addresses the fiscal deficit. U.S. public debt has surpassed $40 trillion, according to Treasury data.

Citigroup's currency strategists cut their three-month forecast for the dollar index from 102.12 to 98.34, reflecting concerns over Treasury buybacks and expectations for a less aggressive Fed. A weaker dollar lowers costs for international buyers of dollar-denominated gold.

Hormuz Shipping and the Fed Path

The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations and defensive demand. Seven commodity ships moved through the strait Thursday, about half the previous day's tally, with traffic running at a fraction of prewar volumes. U.S.-Iran talks remain stalled and Washington is threatening tougher economic measures against Tehran.

Fed minutes released Wednesday showed several officials were prepared to raise rates if inflation fails to cool, but traders still lean toward a hold next month after softer CPI, flat headline PPI, weak retail sales and weaker consumer sentiment. The Jackson Hole Economic Symposium is the next major policy event, with markets watching Fed Chair Kevin Warsh for guidance.

Silver bulls target $69.48, then $71.03, while a break below $68.02 opens $66.55 and $64.20.

This article is for informational purposes only and does not constitute investment advice.