Gold's Two-Way Stretch: Treasury Buybacks Lift Bullion While Beijing's Appetite Reshapes the Floor

Gold jumps to $4,545 as US Treasury doubles buybacks, weakening dollar and yields, while China's central bank extends 21-month buying streak.

Gold traders got a double dose of bullish signals this week, but the forces driving the metal higher are pulling from very different directions. On one side sits a mechanical shift in US debt management that has weakened the dollar and lowered real yields; on the other, a relentless wave of physical buying out of Beijing that shows no signs of abating.

Spot gold jumped 3.6 percent on Wednesday to roughly $4,545 per ounce, a move that pushed the metal back toward its 200-day moving average of $4,549. The advance extends a monthly gain of 13 percent and comes just days after the metal had been testing support near the $4,400 mark.

Treasury's Bigger Buyback Machine

The immediate catalyst for Wednesday's surge was an announcement from the US Treasury. The department said it would double the maximum size of its buyback operations for long-dated government debt, lifting the cap from $2 billion to at least $4 billion for maturities spanning 10 to 20 years and 20 to 30 years. The expanded program runs from September 9 through November 4, coinciding with the current refinancing quarter.

The market response was swift. Yields on the 30-year Treasury fell from above 5.3 percent to approximately 5.19 percent, easing the opportunity cost of holding a zero-yield asset like gold. The dollar index, meanwhile, slipped about 0.6 percent to a two-and-a-half-month low, making bullion cheaper for buyers holding other currencies.

TD Securities analysts framed the Treasury's increased liquidity operations as fresh tailwind for precious metals, noting that the combination of a softer dollar and lower yields creates a more hospitable environment for gold.

Beijing's Unbroken Buying Streak

While the Treasury move provided the spark, China's central bank has been quietly building a foundation beneath the market for nearly two years. The People's Bank of China added another 20 tonnes to its reserves in July, marking the 21st consecutive month of accumulation. Market observers view the sustained buying as a strategic diversification away from traditional reserve currencies.

The scale of Chinese demand is striking. Imports during the first five months of 2026 jumped 76 percent year-on-year to 692 tonnes, with May alone seeing over 163 tonnes enter the country — the strongest monthly figure in more than two years.

The high price environment has dampened jewelry demand, but investment products and official purchases have more than compensated. Analysts point to this institutional anchoring as a key reason gold has shown resilience even when bond market dynamics have turned against it.

A Market Split Between Two Forces

Just days before Wednesday's rally, the metal was contending with a very different set of pressures. Yields on 30-year US Treasuries had touched a 19-year high, prompting profit-taking and pulling gold back from a test of the $4,450 level. Geopolitical tensions in the Strait of Hormuz and the unresolved US-Iran conflict have kept a risk premium embedded in the price, preventing a deeper correction.

That tension between bond market headwinds and geopolitical support has defined gold's recent trading range. Technicians note that as long as the metal holds above $4,290, the medium-term structure remains intact within a broader uptrend. A breakout above $4,450 could open the path toward $4,550.

What Traders Are Watching Next

Wednesday evening brings the release of the Federal Reserve's minutes from its latest policy meeting, with traders parsing the document for clues about the September decision. The CME FedWatch Tool currently prices a 65 percent probability that the Fed holds rates steady, with weaker US economic data having tempered expectations for further hikes.

Beyond the minutes, attention is turning to the Jackson Hole Symposium and the speech from Fed Chair Kevin Warsh. Markets are pricing the same 65 percent odds of a September pause, with the remaining 35 percent assigned to another rate increase. Any shift in those expectations could amplify gold's volatility in the coming days.

The broader precious metals complex moved in tandem with gold on Wednesday. Silver gained 2.7 percent to $65.01 per ounce, while platinum advanced 3.2 percent to $1,766.55.

From a technical standpoint, reclaiming key levels such as the EMA50 has been viewed positively by chart watchers. With the relative strength index at 66.3, gold is not yet in overbought territory, leaving room for further upside should the Fed minutes deliver no surprises. The question now is whether the metal can defend the psychological $4,400 support level while awaiting the next policy signal from Jackson Hole.