Gold Surges Above $4,500 as Treasury Intervention Hits Yields and Dollar

The gold price jumped above $4,500 and silver surged towards $67 on Wednesday after an unexpected US Treasury intervention sent long-term bond yields and the US Dollar sharply lower.

The move was triggered by Washington's decision to double the size of liquidity-support buyback operations for some longer-dated government bonds.

This drove long-term Treasury yields sharply lower, knocking around 0.8% from the US Dollar index and improving the backdrop for non-yielding precious metals like gold and silver.

Robert Gottlieb, a former head of precious metals at Koch Supply and Trading, described the announcement as 'totally unexpected' and 'very bullish for gold', pointing to lower long-term yields and a weaker Dollar.

Ole Hansen, Head of Commodity Strategy at Saxo Bank, highlighted the importance of the reversal in US financial conditions, noting that the combination of lower yields and a weaker dollar was providing gold with a fresh tailwind.