Gold wavers as bond yields rebound, oil jump fuels US inflation worries
Bessent says he is prepared to expand the efforts to buy back costlier debt
Gold prices hovered near $4,510.55 an ounce on Thursday, after initially slipping as much as 1.4 percent following a rebound in bond yields. The US Treasury's surprise buyback plan aimed to purchase costlier debt, seen as a short-term fix, while rising oil prices fueled concerns over inflation and potential interest rate hikes by the US Federal Reserve.
US Treasury Secretary Scott Bessent expressed readiness to expand the efforts to buy back costlier debt, but warned that higher rates negatively impact gold, which does not carry interest. The move by the US Treasury to support long-term borrowing costs is likely to push investors back into gold and bets against the US dollar, according to Citigroup strategists.
However, the path to sustained gold gains may be hindered by energy-driven inflation pressures, as oil prices surged, raising the likelihood of US Fed rate hikes in the coming months.
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