Treasury weighs its cash account as gold reaches 4,649.08 dollars
Treasury may use its 950 billion dollar cash account for larger bond buybacks. Gold reached a three-month high as markets waited for inflation data and Kevin Warsh.
Economics & Markets··Evening
Cash joins the buyback plan
Two senior Treasury officials said the Treasury General Account could help finance expanded purchases of long-dated government bonds. The account holds close to 950 billion dollars. Dealers had expected the purchases to be paid for with new short-term bills after Treasury doubled buybacks of older long-dated securities from 2 billion dollars to at least 4 billion dollars per operation. The report describes existing cash as a funding source available before new bill sales.[1]
The account would later need replenishment
The funding choice changes the sequence of Treasury operations. Cash can be drawn down first, while restoring the account to its earlier level would eventually require additional debt sales. The distinction matters because investors would receive the official demand for long bonds and the debt used to rebuild the cash buffer at different times. Treasury has not said how much of the account it would use, and the report describes the balance as available rather than committed.[1]
Gold extends a third weekly advance
Spot gold rose 1 per cent to 4,649.08 dollars an ounce, its highest level since 15 May, while US futures gained 0.6 per cent to 4,706.20 dollars. The metal had risen more than 5 per cent in the previous week and was extending a third consecutive weekly advance. The session came before US inflation data and Federal Reserve Chair Kevin Warsh's first Jackson Hole address; the source also reported a softer dollar.[2]
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