Gold Surges Toward $4,500 as US Treasury Buybacks Weigh on Yields

Gold prices climbed sharply on Wednesday, with spot gold trading near $4,495, up more than 3.7% on the day. The primary driver behind the rally was a notable move in the US Treasury market. The Treasury's long-dated debt buyback operation that day significantly pushed down yields across tenors, in turn undermining the dollar's appeal and providing strong upward momentum for the yield-bearing-free, dollar-denominated asset.

**Falling Treasury yields are the core catalyst**

The Treasury's buyback move directly eased supply pressure in long-end bonds, guiding yields lower. Earlier, concerns over fiscal deficits and inflation uncertainty had pushed the 30-year Treasury yield to multi-year highs near 5.20%, while the 10-year yield held above 4.68% at one point. The buyback reversed that trend, lowering the opportunity cost of holding gold and spurring a wave of buying. BlackRock, which manages $15 trillion in ETFs, had previously said it saw room for long-term yields to rise further, but the Treasury's direct intervention changed the market landscape in the short term.

**Weaker dollar and geopolitical risks provide additional support**

The pullback in Treasury yields dragged the dollar index off its recent rebound highs, offering a double tailwind for gold. Meanwhile, geopolitical tensions also underpinned bullion prices. According to reports, with the US-Iran negotiation deadline over the Strait of Hormuz expiring, threats and demands have escalated once again, pushing Brent crude back toward the $90-per-barrel mark. Elevated energy prices and geopolitical uncertainty have strengthened gold's appeal as a safe-haven asset allocation.

**Technical picture and long-term outlook remain solid**

From a technical standpoint, gold accelerated higher after breaking out of its recent consolidation range. Despite earlier concerns that a rebound in inflation could force the Federal Reserve to hike rates again in 2026—with markets pricing in a probability of over 55% for a hike, according to the CME FedWatch tool—gold has held key support. Currently, the metal remains firmly above its 200-day simple moving average (currently around $4,363), indicating that the medium-to-long-term bullish structure remains intact. As long as gold holds above that average, the bullish bias is likely to persist.