Gold jumped 3% to $4,550 an ounce after Treasury Secretary Scott Bessent said the department would double its buybacks of 10-30 year government bonds. Citi's macro team responded with a $5,000 base-case price target, and Truist's chief investment officer moved his gold call from negative to neutral.
Gold ripped 3% to the $4,550 an ounce level after Treasury Secretary Scott Bessent announced on Wednesday that the Treasury would double its buybacks of government bonds in the 10-30 year tenor. The VanEck Gold Miners ETF (GDX) spiked more than 9% on the same news. Gold had already been recovering steadily since troughing around $4,000 an ounce at the end of July.
Citi lifts its target to $5,000
Citi's global macro research team, led by Dirk Willer, published a note after the Bessent announcement setting a $5,000 base-case target on gold over a 6-12 month horizon, with a $6,000 target in a bullish scenario. According to Citi: "Gold: chase higher."
Willer's team frames the move as a revival of the debasement trade, a strategy that gained traction in 2025 as investors worried about aggressive fiscal and monetary policy moved out of fiat currencies into inflation hedges and traditional stores of value like precious metals. Willer argues that capping long-term yields comes at a cost: a weaker dollar, since the market is no longer properly compensated for holding long-duration Treasury bonds.
Because gold and the dollar tend to move inversely, Wednesday's drop in the dollar index amplified gold's rally. Willer also notes that gold has historically benefited when short-term Treasury yields rise faster than long-term ones, a steepening of the yield curve.
The rally also lined up with the U.S. national debt breaking through the $40 trillion milestone on Wednesday, which the report called probably not a coincidence. Robin Brooks, a senior fellow at the Brookings Institution, wrote on X that the U.S. is unwilling to rein in its deficit, and that gold is benefiting from mounting global concern over the sustainability of U.S. deficits.
Truist upgrades its gold call
Keith Lerner, chief investment officer at Truist Advisory Services, had held a negative view on gold for most of 2026. But he upgraded his recommendation to neutral after Wednesday, citing several factors: real interest rates have stabilized, removing a headwind for a no-yield asset; gold broke through its 200-day moving average of $4,510 on Wednesday; central bank demand for gold remains resilient; and the softening dollar is also supportive.
Source: MarketWatch
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