Gold and silver have added nearly $5 trillion in combined market value this month after the US Treasury doubled its long-term bond buyback program, reviving fears of a weaker dollar. Gold touched a three-month high above $4,620 an ounce, while silver's rally is being amplified by a separate physical supply squeeze.
Treasury Buyback Ignites the Rally
Gold has climbed 15% this month while silver has surged 19%, together adding nearly $5 trillion in market value per analysis from Bull Theory. Gold pushed to its highest price since May, climbing past $4,600 an ounce and touching near $4,650 in futures trading. Both metals, however, remain below the record highs set earlier this year.
The catalyst traces to Aug. 19, when the Treasury said it would double its long-term bond buyback operations, raising the maximum purchase from $2 billion to at least $4 billion per operation. Treasury Secretary Bessent added that the buyback could grow larger depending on conditions, saying part of the move was meant to signal that yields do not reflect underlying fundamentals. As a result, the 30-year Treasury yield eased to 5.198% after spiking to a 19-year high of 5.337%. The intervention hit the dollar instead, pulling the dollar index down to 98.723 — its lowest level since May 14.
Wall Street Turns Less Bearish on Gold
Truist chief investment officer Keith Lerner said "conditions have improved, leading us to upgrade gold back to neutral," as he upgraded his outlook on gold to neutral this week. He also pointed to resilient central bank buying and gold's reclaimed 200-day moving average as evidence the metal's downside momentum has faded.
Saxo Bank commodity strategist Ole Hansen flagged a move above $4,770 as the next resistance level, with some traders eyeing $5,000 an ounce if the dollar keeps sliding. Reaching the highs seen earlier this year near $5,300 an ounce, though, will likely prove more challenging.
Silver's Supply Deficit Adds Fuel
Beyond the shared monetary backdrop, silver's outperformance also reflects a physical supply deficit and rising industrial demand. Structural consumption from AI data centers, electrical-grid upgrades, and advanced electronics continues to absorb inventory faster than mine production can keep pace. A prolonged war involving Iran has also pushed up energy prices and reinforced gold's role as the primary safe-haven asset.
Sources: Yahoo Finance, InvestingLive, Bitcoin.com
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