Gold prices surged to a three-month high on Friday as the US Treasury’s aggressive long-duration bond buyback rattled currency markets and revived the debasement trade. Spot gold in New York jumped 2.2% to $4,614.63 per ounce, while silver rose 2% to $69.46 per ounce, extending weekly gains to around 5%.
US Treasury Move Triggers Bond and Dollar Rout
The Treasury Department suddenly expanded its buyback of long-term government bonds to curb rising borrowing costs. The announcement stirred old fears about America’s fiscal burden and pushed both government bond yields and the dollar lower. The dollar index fell to a three-month low, adding to heavy losses from earlier in the week.
Debasement Trade Returns After 2025 Rally
Treasury Secretary Scott Bessent confirmed on Thursday that the administration is ready to expand costly debt buybacks and will soon unveil a financial initiative to address rising borrowing costs. This triggered the same “debasement trade” theme that drove gold up 65% in 2025. Debt-laden nations including Japan, France, and the US have shown little appetite for fiscal discipline after Covid-19, leaving inflation and weaker currencies as their only solvent path.
Gold ETFs See Record Inflows After Months of Outflows
Gold exchange-traded funds tracked by Bloomberg bought 18 tonnes of gold on Thursday, the largest single-day purchase since September 2025. This marks a sharp reversal from months of steady outflows and points to a fifth consecutive week of rising investment. Gold has risen about 14% this month, though the rally may slow as rising energy prices stoke inflation fears and keep interest rate expectations elevated.
Gold Still Below January Peak Despite Rally
Despite the strong weekly performance, gold remains roughly $100 per ounce below its record high set in late January 2026. After starting the year near its peak, bullion spent most of 2026 trading lower before this latest surge rekindled investor interest in safe-haven assets.
