Institutions Bet on Gold Amid Treasury Yield Surge
Gold and silver prices have been slipping in recent days, but beneath the surface, there are signs that institutions are quietly betting on gold. The 30-year Treasury yield climbed back to 5.27% on Tuesday, nearly erasing the drop caused by Treasury Secretary Scott Bessent's mid-August decision to double the size of the government's long-bond buyback program.
The mechanism matters more than the headline: Treasury buybacks reduce the supply of long bonds hitting the market, which can pull yields down temporarily. However, this fix cannot shrink the deficit that keeps issuing new debt behind the scenes.
Bank of America's latest fund-flow data show that gold-backed ETFs added $6.4 billion in holdings during a single week in August, the largest one-week gain in roughly ten months. This was not an isolated spike, as the four-week moving average of flows is rising too.
The Silver Institute projects a global silver deficit of 46.3 million ounces for 2026, wider than 2025's shortfall of 40.3 million ounces, even as solar-panel manufacturers cut silver use by close to 19% this year. Mine supply is shrinking faster than demand is falling.
Goldman Sachs derivatives strategist Brian Garrett notes that the options market looks unusually one-sided right now, with high demand for gold call options and almost nobody wanting downside protection through puts.