Gold holds near $4,500 as US Treasury buyback sends bond yields lower
US Fed meeting minutes show concerns about US inflation deepening
Gold traded near $4,500 an ounce after the U.S. Treasury Department announced a significant increase in buybacks of long-term government debt, aiming to lower borrowing costs. This move came following a surge in bond yields, which had reached multi-decade highs. The Treasury disclosed that it would increase the size of its liquidity support buyback operations by at least double for securities dated from 10- to 30-years, signaling greater official support for the U.S. Treasury market and potentially easier financial conditions.
Lower borrowing costs lower the opportunity cost of holding gold, but further gains may be tempered by energy-led inflation pressure, as oil prices rose due to tensions in the Middle East.
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