Gold prices held broadly steady on Friday, August 21, as bullion moved toward its third consecutive weekly advance. The precious metal has benefited from a weaker U.S. dollar and declining longer-term Treasury yields, although investors remain focused on the Federal Reserve’s interest-rate outlook and renewed inflation risks.

Gold Maintains Momentum After Strong Weekly Gains

Spot gold was trading at approximately $4,514.23 per ounce on Friday, leaving the metal up about 3.2% for the week. U.S. gold futures were around $4,571.20 per ounce. The latest move follows a sharp rally earlier in the week, when gold gained more than 3% after a U.S. Treasury announcement contributed to a decline in longer-term bond yields and weakened the dollar.

The performance highlights gold’s sensitivity to movements in real interest rates and the broader U.S. financial environment. Because gold does not generate interest income, lower yields can reduce the opportunity cost of holding bullion and increase its relative appeal. Conversely, a renewed rise in Treasury yields could create pressure on prices.

Weaker Dollar Provides Additional Support

The U.S. dollar was heading toward a weekly decline, providing another supportive factor for gold. Since bullion is priced primarily in dollars, a weaker U.S. currency can make gold less expensive for investors using other currencies and potentially encourage international demand.

U.S. Treasury policy has also become an important market variable. Treasury Secretary Scott Bessent indicated that the government could increase its purchases of longer-dated Treasury securities, after the Treasury announced plans to double the size of its longer-term bond buybacks to at least $4 billion per operation. The initiative has contributed to the market’s focus on longer-term yields and liquidity conditions.

For global investors, including those in Israel, the relationship between gold, the dollar and U.S. government bonds remains particularly important because changes in U.S. yields can influence capital flows across international markets.

Fed Policy and Inflation Remain Key Risks

The Federal Reserve remains central to the direction of gold. Recent labor-market data suggested some resilience in the U.S. economy, while inflation remains a concern, particularly with energy prices continuing to influence expectations for future price growth. Markets were pricing in a greater probability that the Fed would leave interest rates unchanged at its September meeting, although the possibility of further tightening remained.

Geopolitical developments could also affect bullion demand. Gold traditionally attracts interest during periods of financial or geopolitical uncertainty, but higher energy prices caused by geopolitical disruptions can simultaneously increase inflation expectations and reduce the likelihood of monetary easing.

The next phase of gold’s rally will depend on whether lower bond yields and dollar weakness persist. Investors will be monitoring U.S. inflation and employment data, Federal Reserve communications, Treasury yields, currency movements and geopolitical developments. After three consecutive weekly gains, the ability of gold to remain above recent support levels while maintaining demand from institutional and global investors will be critical in determining whether the current advance develops into a broader upward trend or gives way to profit-taking.