Gold Jumps Above $4,500 After US Buyback Move
SingTao · 3 SOURCESabout 2 hours ago2 MIN
Summary
Spot gold rallied sharply after the US Treasury unexpectedly said it would at least double the size of liquidity-support buybacks for longer-dated government bonds, a move investors read as an attempt to ease rising long-term funding costs. The jump in long-bond prices drove yields lower and pulled the US dollar off its highs, helping dollar-priced gold become cheaper for overseas buyers. Gold briefly broke above US$4,500 an ounce, touching as high as US$4,527 before later trading around US$4,480 to US$4,495, while spot silver also advanced strongly. Analysts said the next leg for gold will depend on whether the drop in yields continues, whether exchange-traded fund inflows broaden, and whether inflation pressure linked to energy prices caps gains.
Key Points
- The US Treasury raised the maximum size of each 10-year to 30-year bond buyback operation from US$2 billion to at least US$4 billion, effective September 9.
- After the announcement, the 30-year Treasury yield fell 9.26 basis points to 5.191%, while the 10-year yield dropped 6.14 basis points to 4.641%.
- Spot gold rose about 3.36% and was quoted at roughly US$4,480 an ounce, after earlier hitting an intraday high of US$4,527 and breaking US$4,500.
- Spot silver also climbed, with one report citing about US$65.3845 and another putting it near US$67 during the same rally.
- OCBC strategist Christopher Wong said gold may not rise in a straight line, while central-bank buying and safe-haven demand were also cited as support.
Why It Matters
For Hong Kong investors, the move matters because local access to gold is often through ETFs and other market products that react quickly to swings in US yields and the dollar. It also underlines that policy action in the US bond market can rapidly spill into bullion prices, even as inflation and oil-related risks may keep volatility elevated.