Treasury Buyback Boosts Gold to Six-Week High
The US Treasury announced that it will double the size of buyback operations for long-term government debt, effective September 9. This move aims to provide greater liquidity support and has driven bond prices higher, reducing yields on 30-year US Treasury bonds from a recent high of 5.31% to 5.19%.
Gold bullion jumped $100 in just 45 minutes, hitting its highest price since June above $4460 per troy ounce. Silver also rose, reversing this week's previous $2 drop and trading above $65 per troy ounce. The US stock market gained, snapping three days of losses.
According to pseudonymous bond trader Ed Bradford, the news is what caused the rally in stocks and bonds. However, Weiss Ratings editor Sean Brodrick notes that oil prices fell, which 'makes no sense,' but suggests that the money to buy gold and stocks had to come from somewhere.