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Gold jumps to three-month high after Treasury expands long-dated buys
Bullion climbed above $4,600 per ounce, after the Treasury said it would double buybacks of longer-dated Treasuries, pushing the dollar and yields lower.
Gold prices extended their rally to a three-month high, with bullion rising above $4,600 per ounce after the US Treasury unexpectedly expanded purchases of longer-dated government bonds, weakening the US dollar and boosting demand for the metal, according to Mining.com citing the World Gold Council.
The Treasury announcement on Aug. 19 said it would double buybacks of longer-dated Treasuries after yields climbed to their highest levels in years. The move pushed bond yields and the dollar lower, while spot gold gained more than 3% in a single day to nearly $4,500 per ounce, its biggest one-day rise since February.
By Friday, bullion was above $4,600 and had logged a third straight week of gains, as investors weighed growing concerns about the scale of US debt. The article notes that US debt hit $40 trillion just this week after doubling in less than a decade.
The World Gold Council said the policy shift reflects broader pressures on US financial markets, including persistent fiscal deficits that require more bond issuance and a growing stock of debt that must be refinanced. It also cited changing demand dynamics, including reserve diversification by foreign central banks, capital constraints on banks, competition for investor capital, and a larger share of Treasury demand coming from more price-sensitive buyers such as hedge funds.
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