US Treasury Department to buy back more longer-term bonds

The US Treasury Department announced on Wednesday its plan to purchase more longer-term bonds to counteract soaring borrowing costs, according to a report in the Wall Street Journal. The department plans to at least double the maximum size of its liquidity-support buyback operations for longer-dated nominal securities, from $2 billion per operation to a minimum of $4 billion per operation.

The Treasury Department disclosed that the total US public debt had reached an unprecedented $40 trillion for the first time, having surged by a third in less than five years. Gold prices rose alongside the announcement, with XAU/USD gaining 4.17% to $4,515. Throughout history, gold has served as a store of value and medium of exchange, and is currently viewed as a safe-haven asset during turbulent times.

Central banks are the largest holders of gold, often diversifying their reserves with gold to support their currencies during instability. The price of gold is inversely correlated with the US Dollar and US Treasuries, with gold prices typically rising when the dollar depreciates. Gold also tends to move inversely with risk assets, with its price often falling during periods of strong stock market performance.

Various factors such as geopolitical instability, fears of recession, and changes in interest rates can influence gold prices. The US Dollar's strength or weakness, as measured by XAU/USD, plays a significant role in determining gold prices, as the asset is priced in US dollars.