Gold Prices Rebound 15% in August, Influenced by Expanded U.S. Treasury Buyback

Gold prices rebounded by approximately 15% in August. This is attributed to a combination of U.S. Treasury interest rate suppression policies and a weaker dollar. According to Hana Financial Investment, as of August 25, the monthly increase in gold was about 15%, with a recent weekly increase of 7.4%. The retreat of expectations for a rate hike by the U.S. Federal Reserve (Fed) in September acted as the initial catalyst for the gold rebound. According to the CME FedWatch, the probability of a rate freeze in September increased to about 64% as of August 26. The second catalyst was the U.S. Treasury's expansion of its long-term Treasury buyback. In an announcement on the 19th, the U.S. Treasury stated that it would increase the buyback size for 10-20 year and 20-30 year Treasury bonds from $2 billion to $4 billion per session. This measure will be effective from September 9 to November 4. Hana Financial Investment explained that following this announcement, the yield on U.S. 30-year Treasury bonds fell by about 11 basis points over the course of a week, and the dollar also showed weakness. The simultaneous decline in long-term interest rates and the weaker dollar contributed to the expansion of the gold price rebound. Gold is a non-yielding asset, and its relative attractiveness decreases during periods of rising interest rates, while investment demand tends to increase when the interest burden decreases. This rebound is a correction following previous price adjustments, and future price movements should be monitored alongside U.S. long-term interest rates and dollar movements.