Gold Surges Past $4,600 on Treasury Intervention and Central Bank Demand

The price of gold has surged past $4,600 per troy ounce for the first time since mid-May, driven in part by a deliberate intervention in the US Treasury market. The government's plan to buy back long-dated government bonds is seen as a signal that investors are increasingly nervous about the durability of the dollar's purchasing power.

The move comes as the US federal debt has crossed the $40 trillion threshold for the first time, with Treasury Secretary Scott Bessent announcing plans to double liquidity purchases for ten- to thirty-year government bonds. This development is seen as a way to cap long-end yields and contain the interest burden on the swelling debt pile.

Gold's rally is also being driven by structural central bank demand, with 89 percent of central bank managers expecting global gold reserves to rise in the next year. The World Gold Council reported second-quarter net purchases of 289 tonnes, a record for that period.