Treasury buybacks failed to hold yields as a softer dollar lifted gold
The US Treasury raised buybacks to 4 billion dollars per operation, yet long-term yields rose again. Gold gained 5 per cent for the week as the dollar neared a three-month low.
Economics & Markets··Evening
The buyback doubled, but the relief did not last
The US Treasury doubled its long-dated bond buyback on Wednesday to 4 billion dollars per operation. By Thursday, the 10-year and 30-year yields had moved above their levels before the announcement. The 30-year yield was around 5.25 per cent after reaching 5.33 per cent on Tuesday, while the 10-year was near 4.7 per cent after topping 4.75 per cent. Treasury Secretary Scott Bessent pointed to thin liquidity at the 30-year maturity and said purchases could exceed the current limit.[1]
Stocks rose on Friday, but the weekly picture remained negative
The Dow Jones Industrial Average rose 1.0 per cent on Friday to 53,277, but finished the week down 0.8 per cent. The S&P 500 and Nasdaq Composite each gained 0.4 per cent during the day, while their weekly losses were 1.4 per cent and 2.1 per cent respectively. In bonds, the 2-year yield reached 4.232 per cent, the 10-year 4.736 per cent and the 30-year 5.274 per cent. The daily equity rebound therefore arrived alongside higher yields across maturities.[2]
Precious metals ended the week higher as the dollar weakened
The dollar index slipped 0.02 per cent and traded near a three-month low. Gold rose about 2 per cent to 4,661.70 dollars and silver gained about 2 per cent to 70.08 dollars; each metal advanced roughly 5 per cent for the week. In the market assessments reported by Forbes, a weaker dollar was identified as a main support for commodity prices. The Treasury's increase in buybacks of 10-to-30-year securities was also described as important for gold.[3]
