US Treasury Expands Bond Buybacks, Boosting Market Sentiment

The US Treasury announced that it will double the size of its government bond buybacks, increasing the maximum from $2 billion to at least $4 billion per operation. The program will begin on September 9 and continue through November 4, with the focus mainly on longer-term Treasuries in the 10–20 year and 20–30 year maturities.

The move comes as the bond market has been under significant pressure, with long-term yields reaching levels not seen in 19 years. The immediate market reaction was positive. Treasury yields fell and stock futures rose.

The crypto market is also green today. Bitcoin, Ethereum and other cryptocurrencies surged as President Trump urged Congress to pass the Clarty Act. The move was further amplified by short liquidations. Ethereum gained around 20% over the past week to $2,300, reaching a three-month high. Overall, the crypto rally reflects a combination of supportive US policy signals, falling Treasury yields, improved liquidity conditions and heavy short-position unwinding.

In the commodity market, gold remains below $4,500 but close to its highest level since early June. The main headwind is a stabilizing US Dollar after the release of hawkish FOMC Minutes, which suggested Fed officials could consider raising interest rates if inflation does not make further progress toward the 2% target.

Overall, gold is facing conflicting forces, hawkish Fed expectations and a stronger USD are bearish, while falling Treasury yields, geopolitical risks and safe-haven demand remain supportive.

The market will now focus on US jobless claims, the Philly Fed Manufacturing Index, Fed officials‘ speeches, and new geopolitical developments, all of which could influence the USD and gold’s next move.