Gold Price Action
At 22:37 ET (02:37 GMT) the spot price of gold fell 0.7% to $4,491.35 per ounce, after reaching an intraday high of $4,527.67. Gold futures edged up 0.1% to $4,548.51. Silver was little changed at $66.99 per ounce, while platinum slipped 1.1% to $1,801.42. The US Dollar Index was up 0.1% at 98.84.
Treasury Buyback Program Impact
The U.S. Treasury announced a surprise expansion of its buyback program, doubling the size of certain liquidity‑support operations tied to longer‑dated government debt. The added demand lowered long‑dated Treasury yields, which in turn reduced the opportunity cost of holding non‑interest‑bearing gold, providing a fresh lift to bullion after prices had jumped more than 4% on the previous day.
Dollar and Yield Context
A subdued US dollar further supported dollar‑priced metals by making them cheaper for overseas buyers. The broader backdrop includes total US government debt surpassing $40 trillion for the first time, heightening concerns about fiscal sustainability.
Analyst Commentary
ANZ analysts interpreted the larger buyback program as a signal that policymakers aim to bring down borrowing costs, creating a backdrop that typically favours gold. They also noted that gold had begun recovering after briefly touching $4,000 per ounce last month, with renewed investor demand and central‑bank buying driving the rebound.
Federal Reserve Stance
Minutes from the July Fed meeting showed several officials prepared to raise rates, while many said a hike would be necessary if inflation does not move toward the 2% target. Market pricing via CME FedWatch indicated a 67.3% probability that the Fed will leave rates unchanged at its September meeting and a 32.7% probability of a rate increase. Higher rates generally weigh on gold, whereas a more accommodative stance reduces that disadvantage.
Central‑Bank Demand
A World Gold Council survey found that 45% of central banks plan to increase their gold reserves, citing rising inflation and geopolitical uncertainty as primary drivers.