Gold Soars to 3‑Month High as US Treasury Buybacks Fuel Dollar Debasement

⚡ Key Financial Takeaways

US Treasury’s surprise buyback of long‑dated debt lifts gold above $4,680/oz, marking a 5% weekly gain and the highest intraday level since mid‑May.

Gold‑backed ETFs received 28 tons of inflows last week, while SPDR Gold Shares’ call option open interest hits its highest level since March, amplifying potential volatility.

Treasury Secretary Scott Bessent plans to expand buybacks and announce fiscal measures to curb borrowing costs, fueling concerns over dollar debasement and prompting investors to shift 15% of portfolios into gold.

Treasury Intervention Drives Gold Surge The US Treasury’s unexpected ramp‑up of long‑dated debt buybacks sent gold soaring to $4,680.88 an ounce, its highest intraday price since mid‑May. The move temporarily lowered long‑term yields and weighed on the dollar, sparking a 5% weekly rally that echoes the 65% gold surge seen in 2025.

Investor Sentiment and ETF Dynamics Gold‑backed ETFs logged a record 28‑ton inflow last week, the most since January’s rally that pushed prices near $5,600. Call options on SPDR Gold Shares surged to the highest open interest since March, indicating a surge in speculative bets. Analysts from Global X and Oversea‑Chinese Banking Corp note that while the rally has room to run, consolidation could be healthy as real yields or the dollar rise pose near‑term risks.

Market Outlook and Risks Treasury Secretary Scott Bessent hinted at further buybacks and a forthcoming fiscal initiative to address high borrowing costs. Ray Dalio advised reducing bond holdings and allocating up to 15% of portfolios to gold as a hedge against a potential debt crisis. Goldman Sachs warned that the large volume of outstanding options may amplify volatility, forcing dealers to hedge by trading the underlying ETF. Investors now watch closely for any uptick in real yields or dollar strength that could temper the gold rally.