Gold Surges on Treasury's Surprise Debt Buyback Move

The gold price surged by 4% on Wednesday to $4,518.90, marking its highest level in weeks. The move came as the U.S. Treasury announced it would increase its buyback operations for long-term debt, effectively reducing borrowing costs.

The Treasury's decision to double the size of its liquidity support buyback operations for securities dated from 10 to 30 years was seen as a signal that the government is intervening in the market to hold down long-term rates. This move comes on the same day that the Federal Reserve released minutes from its July meeting, which showed officials debating whether to raise interest rates.

The Fed's minutes suggested that several officials had argued for a rate increase, while many others believed tightening would be necessary if inflation didn't fall. Despite this, traders seemed to focus on the Treasury's announcement and responded by sending gold prices higher.