Published Fri, Aug 21, 2026 · 07:31 AM
GOLD wavered as bond yields rebounded, with the US Treasury’s surprise buyback plan seen as a short-term fix, while rising oil prices fuelled concern that inflation will prompt the US Federal Reserve to raise interest rates.
Bullion was little changed after earlier slipping as much as 1.4 per cent. The 30-year Treasury yield rose a day after the Trump administration’s unexpected decision to boost repurchases of longer-dated bonds, showing the move did little to ease worries about soaring government debt. Still, US Treasury Secretary Scott Bessent told CNBC on Thursday that he is prepared to expand the efforts to buy back costlier debt.
Brent oil, meanwhile, hovered near US$94 as US President Donald Trump’s threat to crush the Iranian economy further clouded the prospect of ending the war.
Gold is holding onto most of its biggest gain in six months from the prior day, supported by “the signal of the Treasury looking to support the longer end,” said Ryan McKay, senior commodity strategist at TD Securities, in a note.
Asked how much more the US Treasury is willing to do to get bond yields down, Bessent said, “We have a big toolkit, so we’ll see. And part of it is signalling here, and to show that we believe that the yields don’t reflect the underlying fundamentals.” Higher rates are negative for bullion, which does not carry interest.
The surprise liquidity injection by Bessent’s department on Wednesday (Aug 19) also revived discussion among analysts about the prospect of persistently elevated US government borrowing and currency debasement, themes that helped power gold’s stellar performance in 2025 as investors sought safe-haven assets.
“The market needs to rotate into another expression of the debasement trade,” Citigroup strategists including Dirk Willer wrote in a note, adding that the US Treasury’s efforts to contain long-term borrowing costs were likely to push investors back into gold and bets against the US dollar.
Gold’s price gains may also be capped by energy-driven inflation pressures, as Thursday’s jump in oil prices raises the prospect of US Fed rate hikes in the coming months.
“The path is unlikely to be linear after the sharp move higher,” said OCBC strategist Christopher Wong. “The key for a more sustained move higher is whether the decline in yields persists and ETF inflows broaden.”
Gold has largely held above the key US$4,000-an-ounce support threshold in recent weeks, with dip-buyers emerging in greater force since a war-driven slump that pushed it into bear territory in June. It is still down around 15 per cent from its level before the US-Iran conflict erupted in late February.
Spot gold fell 0.1 per cent to US$4,510.55 an ounce at 12.15 pm in New York on Thursday (12.15 am in Singapore on Friday). Silver was up 1.7 per cent at US$68.09 an ounce. Platinum rose while palladium declined. The Bloomberg Dollar Spot Index, a gauge of the US currency, was steady after ending the previous session down 0.8 per cent. BLOOMBERG
