Precious metals, including gold and silver, saw big price increases of over 3% on Wednesday. The rally came right after the U.S. Department of the Treasury announced an increase in the size of its nominal long-end liquidity support buybacks, starting September 9.
Gold currently trades above $4,473, and silver is above $65, with both gaining over 3% in Wednesday’s trade.
The buyback announcement has managed to halt the pressure on bond selling, and this is showing up in US Treasury bond yields. The yield on the 10-year US Treasury note fell to 4.65% on Wednesday after testing 20-month highs of 4.75% in the previous session.
If bond yields trend lower, it suggests that interest rates will not stay elevated, which supports non-yielding assets like gold.
Yields fell across the curve after the announcement, with the 30-year rate dropping 9 basis points to 5.19%. This shows Treasury officials are ready to step in to prevent sharp rises in borrowing costs or a decline in market liquidity.
The decision also coincided with a $16 billion auction of new 20-year bonds, which put heightened attention on demand for longer-dated debt. Treasury Secretary Scott Bessent called the buyback program a crucial tool for managing market dislocations and supporting liquidity.
Inside the Treasury’s Buyback Move
The U.S. Department of the Treasury is increasing the size of its liquidity support buyback operations for longer-dated nominal coupon securities (the 10-year to 20-year sector and the 20-year to 30-year sector) by at least double. The current maximum size of $2 billion per operation will now be at least $4 billion per operation.
This change is effective September 9, 2026, and will stay in effect for the remainder of this refunding quarter (through November 4, 2026). The move is in line with the department’s sharp efforts to limit the recent surge in long-dated yields amid soaring AI-debt issuance, higher deficit spending, and risks of elevated inflation.
Will the Rally Hold?
Gold and silver prices have climbed to their highest level in two months, despite ongoing uncertainty around oil prices, inflation, and US Federal Reserve interest rates. How long the rally lasts remains to be seen, as investors now await the US Fed’s FOMC meeting minutes, releasing today.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Gold, silver, and bond market movements are subject to rapid change based on macroeconomic data, central bank policy, and geopolitical developments. Readers should consult a qualified financial advisor before making investment decisions.