US Treasury Bond Buyback Sparks Gold Rally to $4,600
Gold prices surged to their highest level since late May, reaching $4,600 after the US Treasury Department announced an unexpected bond buyback. The move was seen as a bid to stabilize the market and provide liquidity, which boosted investor confidence in gold.
The US Dollar came under bearish pressure at the start of the week, allowing gold to rise nearly 1% on Monday. However, tensions in the Middle East flared up on Tuesday, causing gold to lose its momentum and close the day deep in negative territory.
On Wednesday, the US Treasury's surprise announcement that it would double the size of some long-dated debt buyback operations sent shockwaves through the market. This move provided a fresh catalyst for precious metals, with TD Securities noting that 'the flows could quickly return amid Treasury liquidity support.'