Gold futures advanced 2.2% to $4,673.84 per ounce on Friday, while spot gold rose 2.1% to $4,617.23 per ounce at 16:01 ET, according to market data. For the week, both benchmarks were up roughly 5.4% to 5.6%, extending gains driven by Treasury repurchases of long-dated debt and a softer U.S. dollar.
The U.S. Department of the Treasury announced on Wednesday it would increase buybacks of long-dated government debt to at least $4 billion from $2 billion. Treasury Secretary Scott Bessent suggested the actual amount could exceed the initial figure. The move followed a prior sell-off in longer-term U.S. Treasury bonds, which had pushed the 30-year yield to a 19-year high of 5.337% on Tuesday. The benchmark 10-year yield also reached a 52-week peak of 4.748% before easing to 4.735%.
Analysts cited a combination of factors supporting gold, including fiscal concerns over the U.S. national debt crossing $40 trillion and increased demand for hard assets amid inflation jitters. Rising oil prices and speculation over massive debt issuance by technology firms funding AI infrastructure spending contributed to the earlier bond market volatility. Investors also engaged in the so-called "debasement trade," shifting capital from fiat currencies into gold and cryptocurrencies.
José Torres, senior economist at Interactive Brokers, noted that Treasury’s buyback announcement coincided with geopolitical tensions and strong U.S. economic data, which partially offset the intended impact on yields. He added that a potential Federal Reserve quantitative easing program could further ease pressure on long-term borrowing costs. "Decelerating inflation doesn’t justify a 5-handle on any of the complex’s maturities, and buying duration currently provides an attractive risk-reward profile," Torres said.
Market focus now shifts to the upcoming Jackson Hole Economic Policy Symposium for signals on interest rate policy. Bessent is also scheduled to hold a press conference on Monday to discuss financial sanctions on Iran and the Treasury’s strategy for managing borrowing costs.
