Gold prices extended gains Friday, with spot gold up 2.1% to $4,617.23 per ounce, bringing weekly gains to 5.6% as the U.S. dollar weakened and long-dated Treasury yields surged to multi-year highs.
Futures on gold rose 2.2% to $4,673.84 per ounce, reflecting similar weekly gains of 5.4%. The gains followed a sharp sell-off in longer-end U.S. Treasuries, which pushed the 30-year yield to a 19-year peak of 5.337% on Tuesday before settling at 5.272%, up 3.5 basis points. The 10-year benchmark yield also reached a 52-week high of 4.748% before easing to 4.735%, a rise of 3.7 basis points.
The Treasury’s announcement on Wednesday to increase buybacks of long-dated debt from $2 billion to at least $4 billion initially supported bond markets, but gains were largely erased by Thursday and Friday. The move came as U.S. national debt exceeded $40 trillion, amplifying concerns over fiscal sustainability. Treasury Secretary Scott Bessent is scheduled to hold a press conference Monday to discuss financial sanctions on Iran and plans to curb borrowing costs.
Analysts cited mixed signals in the market’s response. José Torres, senior economist at Interactive Brokers, noted that the buyback announcement was poorly timed, as gains in bond prices were offset by strong economic data and geopolitical risks. He added that further measures may be needed to ease pressure on long-term interest rates, including potential Federal Reserve intervention.
Torres also highlighted that current Treasury yields were unsustainable given decelerating inflation trends, suggesting that duration buying could offer an attractive risk-reward profile. The broader market backdrop includes rising oil prices and robust corporate spending on AI infrastructure, which have contributed to inflation concerns and driven the sell-off in longer-dated bonds.
Investors have increasingly turned to hard assets such as gold amid fiscal skepticism, with gold prices now sitting at three-month highs. The metal’s weekly advance underscores its role as a hedge against currency debasement and rising long-term borrowing costs.
