Gold Prices Soar as Treasury Buybacks Boost Metal's Appeal
The Treasury's long-dated bond buybacks have sparked a surge in gold prices. According to Sam Altman's ChatGPT AI, gold is expected to reach $5,000 to $5,400 by the end of 2026, with $5,200 as the realistic base case.
The catalyst for this prediction is the Treasury decision to double its bond buybacks from $2 billion to at least $4 billion per operation. This move has led to a drop in the 10-year yield and a weakening dollar, causing gold prices to rise sharply.
Gold ETFs have also seen significant inflows of institutional money, with $3 billion of July inflows marking a reversal of two months of outflows.
However, there is still a risk that a renewed inflation shock could force the Fed back into hiking mode, which would undercut this setup and send gold prices towards $4,100 to $4,300 instead.