Gold is on track for a third straight weekly advance, with both spot and futures prices lifted by an unexpected move from the U.S. Treasury to expand its buyback of long-dated government bonds, a step that underscores deepening global concerns over Washington's debt burden.

For the precious metal's price curve, the Treasury's decision to repurchase more 10-year and longer-maturity securities has created a "dual-path benefit" structure: falling risk-free yields lower the opportunity cost of holding bullion, while a loss of control over yields boosts the credit premium investors demand for sovereign risk. In early Asian trading on Friday, spot gold held firmly above the key $4,500-per-ounce level, following Wednesday's surge of more than 4% in a single session, prompting bullish long-term investors to declare that "the familiar gold bull market from six months ago has finally returned."

With spot gold trading near $4,530 an ounce, weekly gains are poised to exceed 3%. Although the 30-year Treasury yield climbed back to around 5.27% during Thursday's session, nearly erasing the price decline triggered by the Treasury's expanded buyback announcement, the powerful liquidity injection delivered on Wednesday has driven a combination of lower long-end yields, a weaker dollar, and escalating safe-haven demand that continues to support gold prices and market sentiment.

On Thursday, U.S. Treasury Secretary Scott Bessent said the department stands ready to scale up buybacks of debt with elevated overall funding costs, and signaled that the government would soon unveil fiscal measures to address the highest benchmark borrowing costs in years. The buyback program is not quantitative easing by the Federal Reserve, nor does it reduce U.S. government debt, yet the Treasury's rescue effort has become a fresh catalyst for gold's new bull run.

Where the real impact lies

The most significant effect on gold's outlook is the shift in market expectations regarding how the Fed and the U.S. government might react to stress: once investors believe authorities will deploy larger dollar issuance, lower real interest rates, or more aggressive debt-maturity management to prevent long-end funding costs from spiraling, the distribution of gold prices skews upward amid a weakening dollar and declining 10-year and longer-dated risk-free yields.

Market debt anxiety combined with the Hormuz Strait storm has driven gold up 11% this month, with a fresh bull run building momentum. Despite long-end Treasury yields recouping most of the losses tied to the buyback announcement in the latter half of the week, the move itself reflects mounting unease over the explosive growth of U.S. government debt. As investors broadly seek alternative safe-haven assets, the pessimistic theme of widening fiscal deficits in Western nations has been a critical driver of gold's multi-year rally.

As illustrated, gold is set for a third consecutive weekly gain. The Treasury raised the single-transaction liquidity support cap for 10-30 year long-dated bonds from $20 billion to at least $40 billion, initially pushing the 30-year yield down about 9-10 basis points, dragging the dollar lower, and sparking a sharp rally in gold. However, yields subsequently recovered most of the decline, indicating that buybacks only improve liquidity for older issues—they neither cancel government debt nor resolve fiscal deficits, interest expenses, or the crowding-out effect of record corporate bond issuance by AI-related tech giants on long-duration capital.

Consequently, the positive market effect of the Treasury's intervention is fading quickly, exposing the fragility of long-dated bonds that require official support, while reinforcing the "fiscal dominance" and "sovereign currency debasement trade": authorities may prefer to accept a persistently weaker dollar and a marginal easing of financial conditions to suppress unsustainable funding costs. However, this logic of "rescuing Treasuries means abandoning the dollar" should be understood as a trading narrative rather than an official abandonment of the strong-dollar policy.

This has handed gold a rare "dual-path benefit" structure with upward convexity: if expanded buybacks push down real yields and the dollar, the opportunity cost of holding non-yielding gold falls; if buybacks fail and long-end yields keep climbing due to fiscal risks, gold benefits as a sovereign credit hedge. Gold is currently around $4,530 per ounce, heading for a third weekly gain, with monthly gains of roughly 11%.

Why just 10 ASX 200 shares?

Month-to-date, gold has climbed about 11%, but a rebound in energy prices that has stoked broad inflation and rate-hike expectations could cap further upside, as inflation risks and tightening bets persist. U.S. President Donald Trump's threat to "destroy" Iran's economy has further dimmed hopes for a near-term deal to reopen the Strait of Hormuz, while continued Houthi attacks on Saudi Arabia have sharply reduced shipping through the Bab el-Mandeb strait, another vital Middle East energy route, setting crude oil up for significant weekly gains.

The White House said it would release details of the plan on Monday. Since mid-July, gold has held above the critical support level of $4,000 per ounce; after a war-induced selloff pushed the metal into bear-market territory in June, dip-buying has since emerged. Gold remains roughly 15% below levels seen before the U.S.-Iran conflict erupted in late February.

As of 8:11 a.m. Singapore time, spot gold was up 0.2% at $4,522.90 per ounce. Silver rose 0.1% to $68.16 per ounce. Platinum and palladium also advanced. The Bloomberg Dollar Spot Index, which measures the greenback against a basket of peers, slipped 0.1%.

Navigating the risk path

For precious metal investors, the key risk path to watch is whether inflation forces the Fed into more aggressive tightening than expected, driving real yields and the dollar higher in tandem, which would pressure gold. However, as long as long-end yield increases stem mainly from fiscal credit risk rather than improved real growth, gold could break the traditional "higher yields, lower gold" relationship, achieving dual benefits of "earning opportunity cost when rates fall, and earning credit premium when rates spiral."

Is the familiar gold bull market back? Gold has reclaimed $4,500, with Wall Street targets clustered between $4,900 and $6,000. With spot gold holding above the $4,000 support since mid-July and now firmly above $4,500, the rally signals more than a technical rebound from the U.S.-Iran conflict—it reflects a structural revaluation driven by U.S. debt surpassing $40 trillion, policy intervention in the long-end yield curve, and global reserve diversification.

The Treasury's expanded 10-30 year buyback has built a "dual-path benefit" structure with upward convexity for gold. The first path is policy effectiveness: the Treasury absorbs long-duration risk, pushes down nominal and real yields, and weakens the dollar, thereby reducing the opportunity cost of holding non-yielding gold. The second path is policy failure: if buybacks only briefly suppress yields before long bonds are sold off again, the market will further price in fiscal deficits, term premiums, and dollar credit dilution, with gold commanding a higher risk premium as a non-sovereign reserve asset.

The market reaction to the buyback announcement—yields and the dollar initially falling, gold surging, followed by a quick rebound in long-end yields—has sequentially validated both bullish logics. Wall Street target ranges are also moving higher in tandem: Citigroup strategist Dirk Willer sees gold at $5,000-$6,000 over the next year, citing Treasury intervention, the risk of uncontrolled term premiums, a weaker dollar, and the resumption of de-dollarization trades. Deutsche Bank's year-end base case is $4,700-$5,100, underpinned by two non-price-sensitive demand sources—central bank buying and ETF inflows—with gold ETFs seeing net inflows of roughly 1.5 million ounces over the past 30 days and cumulative additions of about 4 million ounces this year, while central bank gold purchases reached $38.88 billion in the first quarter of 2026.

Notably, Deutsche Bank's model also generates a statistical upside scenario of $6,400, but this is not an official base-case target. Bank of America's senior strategist Michael Hartnett, dubbed "Wall Street's most accurate strategist," leads a team arguing that "going long gold is the best trade right now," aligning with Deutsche Bank's view that gold is in an "explosive rally phase." The underlying logic across these bullish calls points to the same structural investment theme: the U.S. government's ever-expanding debt, $1.4 trillion in interest expenses, and a wave of AI-driven corporate bond issuance are all competing for long-term capital, pushing up term premiums. When rising yields threaten fiscal sustainability and risk assets, policymakers must find ways to lower funding costs, making gold the asset to hedge the cycle of "bond value erosion—policy intervention—declining dollar purchasing power."

Hartnett's rationale for ranking "long gold" as the top trade is that it serves as the best hedge against dollar depreciation, bond market disorder, and asset inflation, with the underlying judgment that U.S. debt could approach $50 trillion by 2029, while the AI financing frenzy further competes for institutional funds traditionally allocated to long-dated Treasuries.

Outlook and key levels

In the view of Bank of America, Deutsche Bank, and other Wall Street giants, gold is likely entering a new upward leg within a long-term structural bull market, though a single-day surge alone cannot confirm an imminent vertical rally. If Middle East geopolitical tensions spiral further and severe energy inflation forces the Fed to hike rates consecutively, pushing real yields higher, gold could still retreat toward the $3,900 low.

Wall Street's long-term gold targets show "aligned direction, divergent magnitude": Deutsche Bank's latest year-end range is $4,700-$5,100; Goldman Sachs maintains its year-end target of $4,900 even after shifting to a more hawkish rate assumption; Bank of America's 2026 bullish target is $5,000; Morgan Stanley and UBS project gold at $5,200 in the second half of this year or over the next 12 months; and JPMorgan expects average prices of $6,000 in Q4 2026. Based on the $4,500 level, these targets imply potential upside of 4% to 33%. The $4,700 level may be the first target zone, $5,000-$5,100 is the core validation zone for institutional base-case scenarios, while $6,000 would require further dollar depreciation, accelerated ETF inflows, faster fiscal deficit expansion, or severe deterioration in AI-related credit risk.