US Treasury buyback plan boosts gold, bitcoin prices

The recent announcement by the U.S. Treasury to increase buybacks of longer-dated Treasury securities has led to notable movements in the financial markets, particularly in gold and bitcoin. The Treasury’s decision to double the maximum buyback size from $2 billion to at least $4 billion per operation, effective from September 9 through November 4, appears to have had a significant impact. Following this announcement, 30-year Treasury yields fell sharply, while both gold and bitcoin saw price increases. The U.S. dollar, conversely, weakened, which is often associated with rising commodity prices. In the prediction markets, the reaction to the Treasury’s move has been evident. Pricing in certain markets suggests a shift in expectations regarding gold’s potential to hit higher price points by the end of 2026. Notably, scenarios where gold prices reach $15,000 by December 2026 have seen slight adjustments in implied probabilities, though still indicating a low likelihood. However, the strengthened competitive position of gold and bitcoin in response to the buyback highlights how market participants view these assets as hedges against currency devaluation and economic uncertainty. Key ...