Treasury Buybacks Drive Long-Term Yields Higher as Gold Prices Defy Inflation Data

Global markets experienced volatility as the U.S. Treasury increased long-term bond buybacks to $6 billion, yet 10-year Treasury yields climbed to 4.85%, a high since November 2023. The sell-off is attributed to systemic shifts in demand, including divestment by sovereign wealth funds like Norway's and the impact of potential Bank of Japan interest rate hikes. Meanwhile, U.S. August PPI data showed a 0.4% monthly increase, with upward revisions to July figures fueling rate hike expectations. Despite the pressure from rising yields and a stronger dollar, gold prices showed resilience after an initial dip. Analysts suggest that gold is increasingly being priced based on concerns over U.S. fiscal credit and sustainability rather than just interest rate sensitivity.