Gold climbed toward $4,700 an ounce Tuesday, reaching its highest level since mid-May.

Bitcoin crossed $80,000 for the first time in three months as the dollar weakened.

Gold-backed ETFs recorded $3 billion in net inflows in July after two consecutive months of outflows.

Gold rose to a three-month high on Tuesday, extending its August rally as a weaker dollar and falling Treasury yields increased demand for the precious metal. Because gold is priced in dollars, a softer greenback makes it cheaper for buyers using other currencies.

Spot gold reached $4,696.18 an ounce, its highest level since May 14, before pulling back. Bitcoin also moved higher alongside gold, climbing above $80,000 for the first time since mid-May and reaching $81,237 before giving back some of its gains.

The moves came as the dollar and long-term Treasury yields fell after the Treasury Department expanded bond buybacks last week. The department began conducting regular buybacks in 2024 as a liquidity-management tool for the world's largest government bond market. According to a recent report from the World Gold Council, gold rose 3% after the announcement.

Demand for gold investment products had already begun to recover. Global gold-backed exchange-traded funds recorded $3 billion in net inflows in July, reversing two straight months of outflows, according to the World Gold Council. Holdings increased by 23 metric tons to 4,068 tons, while assets under management rose 1% to $530 billion.

“Markets have largely priced out a September Fed hike as softer data, albeit influenced by seasonality and World Cup-related distortions, have eased concerns about further tightening,” the World Gold Council wrote. “At the same time, Commodity Trading Advisor (CTA) positioning in Treasury futures is still very short, and a reversal could reinforce downward pressure on yields and an already softer dollar–adding further support to the nascent recovery in gold since the beginning of the month.”

The World Gold Council said investors returned to gold as prices recovered in July, ending a four-month losing streak with a roughly 2% gain. European funds led inflows with $2 billion, followed by $616 million in Asia and $71 million in North America. ETF flows are one strand of a broader demand picture: central banks have been persistent buyers, adding more than 1,000 metric tons of gold annually since 2022, according to World Gold Council data.

The rally accelerated in August as the end of the U.S.-Iran ceasefire and expanded U.S. Treasury bond buybacks added to geopolitical and fiscal uncertainty.

Gold and Bitcoin have both benefited from the weaker dollar, although investors typically buy the assets for different reasons. Gold has traditionally served as a haven during periods of economic and geopolitical uncertainty, while Bitcoin is increasingly traded as an alternative to government-issued currencies.

“BTC and gold rising together while the dollar weakens is consistent with debasement and fiscal-credibility concerns, i.e., the classic 'hard asset' hedge trade,” Jake Kennis, senior research analyst at Nansen, told Decrypt.

“But a weaker dollar alongside elevated yields can also reflect higher term premium, inflation uncertainty, or changing growth expectations rather than a pure loss of faith in Treasuries, so the correlation is suggestive rather than proof as of now.”

Attention now turns to the Fed's September policy meeting, where markets have largely priced out further tightening, to any additional expansion of Treasury buybacks, and to whether the recovery in gold ETF demand extends beyond July.

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