Gold is near its highest level in nearly three months. It was buoyed by measures taken by the Ministry of Finance

Precious metal prices surged, pushing gold to its highest closing level since May 29, according to The Wall Street Journal. During trading on August 19, spot gold rose nearly 4% to $4,499.41 per ounce. Silver prices soared more than 4% to over $66.

Investors reacted to statements from the U.S. Treasury Department regarding a doubling of the maximum volume of government debt buybacks—from $2 billion to “at least” $4 billion. The department’s actions, at least for the time being, halted the rise in Treasury yields, which had been putting pressure on precious metals that do not generate a regular cash flow.

Against the backdrop of a stalemate in U.S.-Iran negotiations, a resurgence in oil prices, and concerns about accelerating inflation, yields on long-term U.S. Treasury bonds have remained near multi-year highs since the start of the week.

And although the announced volume of government debt buybacks does not necessarily mark a turning point for the market—since it is small in absolute terms and relative to the total volume of Treasury bond issuance— the positive reaction from investors was driven by expectations that, under U.S. Treasury Secretary Scott Bessente, the department will take more aggressive measures to curb the rise in Treasury yields, according to MarketWatch. Overall, the publication notes, the U.S. Treasury bond market is worth about $31 trillion.

“The more important signal is that Bessent appears ready to use balance sheet tools more aggressively when conditions at the ultra-long end of the yield curve begin to deteriorate,” said Vincent An, portfolio manager at Wisdom Fixed Income Management, commenting on the Treasury Department’s move (as quoted by MarketWatch).

This article was AI-translated and verified by a human editor