Gold rose to $4,530 per ounce on Thursday, extending the prior session’s rally to the highest level since June. The move followed fresh US Treasury intervention in the bond market, which pushed the dollar lower and reignited the so-called “debasement trade.”
The Treasury Department announced that it will at least double its purchases of notes and bonds in the coming fiscal quarter. This marks another attempt by Washington to rein in surging longer-dated yields, coming on the heels of Secretary Bessent’s call to raise the Federal Reserve’s FIMA facility limits.
Lower borrowing costs reduce the opportunity cost of holding non–interest-bearing assets such as gold. At the same time, the prospect of increased deficit spending, coupled with rising expectations that the US government will continue to suppress borrowing costs, has reinforced the view that precious metals offer strong protection against downside risks to the dollar’s purchasing power.
