Gold Soars Over 3% Amid US Treasury's Surprise Liquidity Support Announcement

Gold prices surged over 3% on Wednesday to their highest level in two and a half months, after the US Treasury announced it would double the size of liquidity support buyback operations for longer-dated bonds.

This move knocked down bond yields and caused the dollar index to fall 0.8%, making dollar-priced gold less expensive for holders of other currencies.

Robert Gottlieb, a former head of precious metals at Koch Supply and Trading, attributed the surge in gold prices to lower yields on longer-dated Treasuries and the potential for a weaker dollar.

The announcement by the US Treasury had a significant impact on the market, with spot gold climbing 3.5% to $4,486.88 per ounce, while U.S. gold futures increased 2.8% to $4,546.10.