Gold Surges to Three Month High Following US Treasury Buyback Plan

Gold prices held near a three-month high on August 25, 2026, supported by a weakening U.S. dollar and the U.S. Treasury's plan to increase long-dated bond buybacks, despite spot gold dipping 0.4 percent to $4,634.35 per ounce in morning trading.

The rally was reinforced after U.S. Treasury Secretary Scott Bessent announced a bond repurchase program expected to exceed $4 billion, boosting spot gold to a peak of $4,679 per ounce and gold futures to $4,738.50 on August 24 before prices consolidated near $4,698 per ounce on Tuesday.

Market participants are now closely watching the upcoming Personal Consumption Expenditures price index release on Wednesday and Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole Symposium on Friday for signals on future interest rate policy.

Investment banks have adjusted their outlooks upward following the fiscal moves, with UOB forecasting gold's strongest monthly gain since September 1999, while Citigroup raised its three-month price target to $4,800 per ounce and Morgan Stanley projected prices reaching $5,000 by 2027.

Analyst Ricardo Evangelista of ActivTrades noted that bullion consolidated above $4,600 per ounce, though further upside remains tied to dollar weakness and stabilized Treasury yields.

Analyst Ewa Manthey of ING emphasized that the market reaction extended beyond interest rate movements.

"Gold's resilience suggests that the rally is not simply a response to lower yields," said Ewa Manthey, commodity strategist at ING.

Manthey further explained how government spending plans are shaping investor sentiment.

"The prospect of larger Treasury buy-backs has refocused attention on government borrowing and fiscal credibility. It has also revived concerns about currency debasement, reinforcing gold's appeal as a store of value," said Ewa Manthey, commodity strategist at ING.

The fiscal concerns come as total U.S. federal debt topped $40 trillion for the first time in history, sustaining strong demand for precious metals as portfolio hedges against fiat currency erosion.

Meanwhile, silver futures slid 0.3 percent to hover near $69 per ounce, following a brief surge past $70 per ounce late last week for the first time since June.