Treasury Doubles Bond Buybacks as Gold Surges Past $4,500

Gold prices surged 3.6% on Wednesday to approach $4,500 after the US Treasury doubled its long-dated bond buybacks. The move sent yields and the dollar sharply lower, providing a double boost to gold through lower yields and a weaker greenback.

The Treasury announced it would increase liquidity-support buybacks for 10- to 30-year securities from $2 billion to at least $4 billion per operation. This decision was made outside of the usual quarterly schedule, indicating officials were responding directly to the bond rout.

Metals trader Robert Gottlieb called the announcement 'totally unexpected' and 'very bullish for gold,' according to Reuters.