Gold Skyrockets 3% After US Treasury Doubles Bond Buyback Operations

Gold prices surged more than 3% on Wednesday as a US Treasury announcement on longer-dated bond buybacks pushed Treasury yields and the dollar lower, boosting demand for the non-yielding metal.

The move came after the Treasury said it would double the size of its liquidity-support buyback operations for longer-dated bonds. Spot gold rose 3.7% to $4,495.02 an ounce, with US gold futures gaining nearly 3% to $4,552.

The higher price comes despite a sharp increase in Treasury yields over the past few months, but Wednesday's announcement reversed some of that trend. The 30-year Treasury yield dropped more than eight basis points to 5.20%, while the 10-year yield declined nearly five basis points to 4.660%.

Robert Gottlieb, an industry expert and former head of precious metals at Koch Supply and Trading, described the move as 'totally unexpected' and 'very bullish for gold due to lower yields on longer-dated Treasuries and as it may help to bring the dollar lower,' according to a Reuters report.