Is the familiar golden bull market back? The U.S. Treasury is buying back long-term bonds, and $4,500 may become the starting point for a new upward wave.

After the U.S. Treasury unexpectedly took action to curb the rise in long-term borrowing costs, both spot and futures gold prices maintained their largest gains in six months. Early Thursday in the Asian market, spot gold prices stabilized above the important threshold of $4,500 per ounce, following a wild surge of over 4% the previous day, prompting investors optimistic about a long-term bull market in gold to exclaim, "The familiar feeling of the gold bull market from six months ago has finally returned." The U.S. Treasury unexpectedly announced an increase in its repurchase operations for long-term treasury bonds, signaling its intention to lower benchmark borrowing costs after yields on 10-year and longer-term U.S. bonds reached decades-high levels. The U.S. Treasury stated it would "at least double the liquidity-supportive repurchase operations for U.S. Treasury bonds with maturities of 10 to 30 years." Hours later, Treasury Secretary Janet Yellen disclosed that the total U.S. public debt had exceeded $40 trillion for the first time; this figure has increased by a third in less than five years. This move indicates that the government will provide stronger support for the U.S. Treasury bond market, and together with a series of weak economic data and inflation trends, market expectations for the Federal Reserve to raise interest rates this year are cooling, which could significantly push the global financial environment towards easing, thus substantially reducing the opportunity cost of holding gold. As shown in the chart above, following the Treasury's announcement of the buyback policy, gold broke through a key levelit is currently trading around the 200-day moving average. From the perspective of Wall Street financial giants like Bank of America and Deutsche Bank, gold is likely entering a new rising phase in a long-term structural bull market. However, it would be premature to assert a resurgence of a linear upward trend in gold prices based solely on a single day's price surge. After the geopolitical situation in the Middle East spiraled out of control, severe energy inflation could compel the Federal Reserve to raise rates continuously, and if real yields start climbing again, gold prices may retreat to the vicinity of the $3,900 low point. Nearly unanimous long-term bullish views on gold from Wall Street essentially point to the same structural theme: the persistent expansion of government fiscal deficits, the increasingly large interest payments around $1.4 trillion, and the bond issuance frenzy by AI-related tech companies are all vying for long-term capital, driving up term premiums; when yields rise and threaten fiscal sustainability and risk assets, policymakers must find ways to lower borrowing costs. Consequently, gold becomes an asset that hedges against the negative feedback loop of "declining bond valuespolicy interventiondecreasing real purchasing power of the dollar." The unexpected intervention from the Treasury, along with the buyback of long-term bonds, injects liquidity into the U.S. Treasury bond market. Gold futures surged notably on Wednesday, rising to their highest level in nearly three months; after the U.S. Treasury unexpectedly injected liquidity and planned to at least double the scale of its long-term treasury bond buybacks, both U.S. treasuries and the dollar fell. The yield on 30-year U.S. Treasury bonds dropped by 9 basis points to 5.19%, marking the largest single-day decline since October of the previous year; the yield on 10-year U.S. Treasury bonds fell to 4.65%, and the dollar index decreased by 0.8%, making gold priced in dollars cheaper for holders of other currencies. Just the trading day before, as investors grew concerned about the U.S. fiscal deficit, inflation, and AI companies heavily leveraging, the yield on 30-year U.S. Treasury bonds briefly reached its highest level in 19 years. TD Securities latest research report stated that the U.S. Treasury's announcement to increase liquidity-supportive repurchase operations has "injected new vitality into the precious metals market." The institution noted that against the backdrop of the Treasury providing liquidity support, the Fed being willing to temporarily tolerate the energy shock, and the intensifying narrative of stagflation, investment funds in gold "might swiftly return; these factors should ultimately drive real interest rates down. Ole Hansen, a senior commodity strategist at Saxo Bank, stated in a report that although the Treasurys increase in the repurchase scale from a maximum of $2 billion each time to at least $4 billion seems trivial in comparison to the federal government's debt size of about $40 trillion, this move releases a signal that the authorities will boost their support for the U.S. Treasury bond market, ultimately implying a looser financial environmentthis acts as a bullish combination for gold. Hansen added that the more markets perceive such measures as distorting the normal pricing in the bond market, the greater the possibility of a weaker dollar, which would continue to support the gold bull market. Expectations of easing outweigh hawkish minutes, aiding precious metals' upward momentum. However, inflationary pressures driven by energy prices could inhibit further increases in gold. Oil prices continue to rise, as prospects for a peace agreement between the U.S. and Iran over the Strait of Hormuz remain bleak, and tensions in the Middle East have escalated further between the United Arab Emirates and Iran. The minutes from the Federal Reserve's July meeting released on Wednesday indicated that the number of officials supporting a rate hike last month exceeded the three who formally voted against it, with some officials stating that they might support a hike if inflation does not improve. Higher interest rates typically disadvantage gold, which does not yield interest. Nevertheless, examining trends in the precious metals market, it is evident that expectations for easing have clearly outweighed the hawkish stance seen in the Federal Reserve's minutes. Long-end yields and the dollar have both decreased, reducing the opportunity cost of holding non-interest-bearing gold, pushing gold futures to the highest settlement levels since May, with spot gold significantly remaining above $4,500 per ounce. As of 7:21 AM Singapore time, spot gold was up 0.1% at $4,520.05 per ounce; silver also rose by 0.1% to $67.01 per ounce. Platinum and palladium saw slight increases. The Bloomberg Dollar Spot Index, which measures the dollar's performance, remained largely unchanged after falling by 0.8% the previous day. The Treasury's scaling up of liquidity-supportive repurchase operations for long-term bonds from a maximum of $2 billion per transaction to at least $4 billion prompted the 30-year yield to sharply decrease by 9 basis points to 5.19%, and the dollar index fell by 0.8%, allowing gold to quickly return to around $4,500 per ounce. These asset price movements also reveal the current most crucial pricing mechanism for gold: the market is not only trading rate cuts but also trading the potential "financial stability put option" that the U.S. government might employ when confronting $40 trillion in debt and uncontrolled long-end yields. However, the Treasury's repurchase initiative solely enhances the liquidity of older bonds; it does not eliminate the fiscal deficit or reduce net debt supply. Therefore, its deep benefits for gold are not a one-time liquidity injection but rather reinforce the market's expectations for fiscal dominance, diluted dollar credit, and future financial repression. Thus, one cannot assert a significant resurgence of a linear upward trend in gold based solely on a single days price surge. Additionally, investors should remain vigilant regarding the geopolitical tensions in the Middle East that might lead to soaring oil prices, potentially pushing inflation expectations higher: if energy shocks compel the Fed to raise rates, real yields could rise again, putting the sustainability of gold's upward breakout to the test. Gold reclaimed $4,500, with Wall Street targets densely pointing towards $4,900$6,000. Led by Hartnett, a senior strategist recognized as Wall Street's most accurate strategist, Bank of America's strategist team posits that "going long on gold is the optimal solution at present," aligning with Deutsche Bank's notion that "gold is in an explosive growth phase, as well as the core logic of other major Wall Street firms bullish on gold, all fundamentally refer to the same structural investment line: the increasingly enormous U.S. government debt, $1.4 trillion in interest payments, and the bond issuance frenzy from AI companies are competing for long-term capital, thus pushing up term premiums; once yields rise and threaten fiscal sustainability and risk assets, policymakers must find ways to lower financing costs, positioning gold as an asset that hedges against the loop of declining bond valuespolicy interventiondecreasing real purchasing power of the dollar. Changes have also occurred on the demand side for gold; data from Deutsche Bank shows that gold ETFs experienced a net inflow of 1.5 million ounces in the last 30 days, with year-to-date holdings increasing by about 4 million ounces. Central bank gold purchases reached $38.88 billion in the first quarter of 2026, with significant official purchases not fully reported. Unlike jewelry demand, which is highly price-sensitive, central bank reserve diversification and strategic ETF allocations are closer to inelastic demand, meaning that even at historically high prices, gold will not necessarily witness a collapse in demand. Wall Street's long-term bullish price targets for gold show consistent direction with varying magnitudes: Deutsche Banks latest year-end range is set at $4,700$5,100; Goldman Sachs maintains a year-end target of $4,900, even after shifting to a more hawkish interest rate assumption; Bank of America's bullish projection for 2026 is $5,000; Morgan Stanley and UBS respectively expect gold prices to rise to $5,200 in the second half of this year or within the next 12 months; JPMorgan estimates the average price for the fourth quarter of 2026 could reach $6,000. Based on a baseline of $4,500, these targets roughly correspond to potential gains ranging from 4% to 33%, where the core difference lies not in the trend of central bank gold purchases, but in whether the Fed will raise rates, the speed of ETF capital inflow, and the trajectory of real interest rates. Gold seems to possess both macro and financial conditions for a new rising cycle; however, the areas around $4,500 and the 200-day moving average are trend confirmation zones, rather than positions to blindly chase amid significant volatility. If the Treasury supports lowering long-term real yields, the dollar continues to weaken, and ETF inflows maintain their momentum, gold prices may first enter Deutsche Bank's target range of $4,700$5,100. If there is further default risk pricing or a shift in capital from U.S. treasuries to gold, the $5,200$6,000 range could serve as the phased target for the next bull wave. Conversely, should the geopolitical situation in the Middle East spiral out of control, and severe energy inflation compel the Fed to raise rates continuously, pushing real yields higher, gold could still retrace to around $4,400 or even the $3,700$3,800 range under Deutsche Bank's pressure scenario.