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Treasury Buybacks and Middle East Tensions Push Gold and Silver to Multi‑Week Highs

The Treasury’s move to expand long‑dated bond buybacks has triggered short‑covering and safe‑haven flows that could be reversed by upcoming U.S. inflation data.

Overview

  • Gold and silver climbed to multi‑week and multi‑month highs on Monday as global prices jumped and Indian retail rates rose to Rs 1,64,400 per 10 grams for gold and Rs 2,53,500 per kilogram for silver.
  • The U.S. Treasury doubled long‑dated bond buybacks to roughly $4 billion per session, a policy shift traders say forced short positions to cover and sparked momentum buying in precious metals.
  • Escalating U.S.–Iran tensions, a softer dollar and higher energy prices added demand for assets seen as safer, which amplified the rally that began after the Treasury announcement.
  • Silver’s larger percentage gains reflect tight physical supply and growing industrial use in data centers, grid upgrades and electronics that are outpacing mine production.
  • Markets are watching U.S. core PCE inflation data and Fed commentary at Jackson Hole for signs that real yields or dollar strength could reverse the move or extend the rally.