Kitco NEWS

.embed-container { position: relative; padding-bottom: 56.25%; height: 0; overflow: hidden; max-width: 100%; } .embed-container iframe, .embed-container object, .embed-container embed { position: absolute; top: 0; left: 0; width: 100%; height: 100%; }My September 2 read is mixed and conditional: BTC is still above its 0.786 Fib, lower-cap market share is improving without confirming ALT season, DXY has a fresh bullish-divergence warning, and the VIX signal is a risk flag rather than proof of a crash.BTC's closing pivot controls the next downside pathI still see BTC above the 0.786 Fib near 76,706. TBO Resistance is appearing above today's high; if it holds into the close, I expect a move below that Fib toward the Fast line near 74,642. The 0.618 Fib near 72,204 matters most: I expect a bounce there, while $62k only comes back into play if that support breaks.OTHERS.D shows lower-cap market-share rotationI see OTHERS.D print its second TBO Close Short in 10 days as capital shifts away from top coins. Dominance is market share, not spot price, so this is not a direct price call. TOTALE50.D and TOTALE100.D support improving breadth, but I am not calling ALT season and I preserve the separate TOTALES resistance-drop warning.DXY prints a second bullish divergenceI see DXY print its second TBT Bullish Divergence in four days while EURUSD confirms a second bearish divergence. DXY can still reject at former support turned resistance, so the bullish warning is not guaranteed. August PMI fell to 54.6 and came in below expectations; that explains the reaction without changing my chart trajectory.The VIX signal is a risk flag, not crash evidenceI see a daily TBO Close Short on the VIX, which points to a possible bullish reversal in the VIX and therefore a potentially bad outcome for risk assets. The previous six signals had mixed reactions, and I do not have hard evidence of a mega dump. I use it only to brace for a deeper pullback or VIX rise just in case.JTO reaches long-term supportI see JTO right at long-term support in a bounce setup I have been watching. RSI could print a bullish Reset. I preserve that state exactly: the bounce is a setup and the Reset is prospective, not confirmed.ONDO is a confirmed but riskier Open Short setupI see ONDO at the bottom of the Cloud with a confirmed TBO Open Short. The last two comparable signals bounced toward TBO Resistance near 0.4071, but RSI was oversold on those occasions and is not oversold now. That makes this a conditional, riskier bounce watch rather than a guaranteed repeat.Learn my strategies and the tools I use every day by visiting The Complete Cryptocurrency Investor by Mastering Assets.

(Kitco News) – Gold prices will rise to $4,900 per ounce by the end of 2026 amid strong demand from central banks seeking to diversify their foreign currency reserves, while investors using gold derivatives to hedge may be making the yellow metal more volatile, according to Goldman Sachs Research.“Gold is projected to extend its recent gains in the second half of 2026, even as growing use of some derivatives tied to the metal could be making gold prices more volatile,” according to Lina Thomas and Daan Struyven at Goldman Sachs Research.The firm forecasts the precious metal’s price will rise to $4,900 per ounce by the end of the year as central banks continue diversifying their reserves and markets scale back expectations for U.S. rate hikes in 2026.The analysts see central bank demand as a key structural factor underpinning gold’s rally.“We continue to see elevated central bank gold accumulation as a multi-year trend, as central banks diversify their reserves to hedge geopolitical and financial risks, consistent with recent survey evidence,” Thomas and Struyven said.Goldman Sachs Research forecasts central banks will buy an average of 50 tonnes of gold per month in 2026, up from an average of 17 tonnes per month in the years before 2022.According to Goldman Sachs Research’s nowcast of central bank activity, sovereign purchases accelerated to 100 tonnes per month in June 2026 on a three-month seasonally adjusted basis, up from 66 tonnes the previous month, with China’s central bank the largest confirmed buyer in June.Another key factor driving the recent gold price increase was interest rate expectations. “Demand from some investors is starting to recover from a slow first half of the year as markets scale back expectations of a Federal Reserve rate hike in 2026,” the report said.“We expect the Fed-related headwind to abate further, as our economists expect a lower inflation trend to keep the Fed on hold this year,” the analysts wrote.They also highlighted a number of medium-term factors that could drive the gold price above their 2026 forecast of $4,900. “Gold’s share in private portfolios remains low, and recent geopolitical developments—including Iran and broader tensions—may accelerate diversification beyond central banks to private investors, including by weighing on perceptions of Western fiscal sustainability,” the analysts said.Thomas and Struyven explained that demand for gold call options is on the rise as investors use them to hedge their portfolios against large-scale changes in government policies – and this has the potential to amplify price swings in both directions.“As gold rises, it is approaching key strike levels for some call options, forcing options dealers that sold these calls to buy gold in order to hedge their short exposure to the metal, accelerating the rally,” the report noted. “On the other hand, declines in the gold price could prompt dealers to reverse those hedges by selling their gold holdings, driving prices even lower.”Goldman Sachs Research’s $4,900 forecast for 2026 does not take into account this elevated demand for hedges through gold derivatives, which increases the upside risk to their forecast, but also implies “greater two-sided volatility” to the gold rally.See live precious metals prices for gold, silver, platinum and palladium — in USD, CAD and 12 more currencies.

(Kitco News) - After taking profits and moving to the sidelines in May, analysts at Schroders announced in late August that they had upgraded their view on gold, re-establishing a position in the precious metal.The London-based asset manager said it sees an increasingly attractive medium-term opportunity despite elevated real yields and gold’s recent rally.In its latest multi-asset outlook, Schroders upgraded gold to positive, highlighting a combination of strong structural demand, improved speculative positioning and persistent concerns surrounding inflation, sovereign debt and currency stability.“A combination of elevated real yields, renewed institutional demand, and cleaner positioning among fast-money investors has prompted us to re-engage with the gold trade; despite the recent rally, we believe that this position may offer an attractive medium-term risk/reward opportunity,” the asset manager said.The firm’s bullish positioning in gold came as the yellow metal was seeing renewed momentum due to growing fears over unsustainable growth in U.S. debt, prompting a renewed debasement trade in the U.S. dollar. Last month, gold prices tested resistance just below $4,700 an ounce.Gold prices have dropped sharply from their recent highs after Federal Reserve Chair Kevin Warsh reiterated his focus on price stability and bringing inflation down to the central bank’s 2% target. Despite some selling pressure, gold prices remain well above the July lows. Spot gold last traded at $4,381.50 an ounce, up more than 1% on the day.Schroders’ bullish stance on gold is also notable, as its analysts remain broadly constructive on the global economy and risk assets. The firm continues to favor equities, supported by resilient global growth and robust corporate earnings, while maintaining a pro-cyclical investment stance.At the same time, Schroders said higher real yields have improved the valuation of U.S. government bonds. Traditionally, rising real yields increase gold’s opportunity costs because the precious metal offers no yield. However, Schroders’ decision to re-enter the market suggests that other fundamental factors are becoming strong enough to offset this traditional headwind.The firm specifically highlighted renewed institutional demand and cleaner positioning among speculative investors as catalysts behind its renewed interest in the precious metal.The analysts also noted that the precious metal is “supported by strong structural demand from central banks and China, alongside persistent concerns over inflation, sovereign debt and currency stability.”Schroders said it remains mindful of risks to monetary-policy independence in an environment characterized by large fiscal deficits, although it continues to have confidence that central banks will maintain an appropriate policy course.The asset manager also expects resilient U.S. growth to keep the Federal Reserve in a tightening posture. Schroders noted that markets are pricing in only a modest amount of additional tightening, leaving room for further rate hikes if its constructive economic scenario unfolds.The firm has also re-established long positions in the U.S. dollar against lower-yielding currencies, including the Japanese yen and Swiss franc.That combination creates what would traditionally be a difficult environment for gold: elevated real yields, the prospect of higher U.S. interest rates and a stronger U.S. dollar. Yet Schroders is nevertheless increasing its exposure to the precious metal.The divergence suggests the firm sees gold’s structural investment case becoming increasingly independent of traditional short-term macroeconomic relationships.Central-bank demand has been one of the most important pillars supporting gold in recent years, as reserve managers diversify their holdings. Schroders also highlighted demand from China as another structural source of support.Meanwhile, concerns surrounding sovereign debt and currency stability continue to strengthen gold’s role as a monetary asset and portfolio diversifier. Those risks could become increasingly important if large fiscal deficits eventually undermine investor confidence in government debt or monetary-policy independence.Schroders’ bullish gold outlook also fits within its broader positive view on commodities. Along with gold, the asset manager remains constructive on energy and industrial metals and maintains exposure to natural resources through global mining companies and energy producers.Although Schroders remains optimistic about global growth, it identified accelerating inflation and a meaningful deterioration in economic activity as two major risks to its outlook. Both scenarios could ultimately reinforce gold’s diversification appeal.For now, however, the key message from Schroders is that investors do not necessarily need falling interest rates or declining real yields to justify owning gold. Even after the precious metal’s recent rally, strong structural demand and mounting concerns over debt, inflation and currency stability have created what the firm sees as an attractive medium-term risk/reward opportunity.See live precious metals prices for gold, silver, platinum and palladium — in USD, CAD and 12 more currencies.

(Kitco News) - Some stability in the U.S. labor market, as the number of American workers applying for first-time unemployment benefits remains relatively unchanged for the fourth consecutive week, is doing little to derail renewed momentum in the gold market.Initial claims for state unemployment benefits came in at a seasonally adjusted 206,000 for the week ending August 29, the Labor Department announced Thursday. The number was in line with expectations. The previous week’s figure was revised slightly higher to 204,000 claims, compared with the previously reported 203,000.After a slow start to the week, bullish momentum has started to pick up in the gold market after two disappointing employment reports raised concerns about the health of the labor market. Spot gold last traded at $4,466.90 an ounce, up nearly 2% on the day.Analysts are paying close attention to broader labor market data and have said that weak job growth could force the Federal Reserve to leave interest rates unchanged later this month. Gold prices have struggled in recent days after Federal Reserve Chair Kevin Warsh said in his speech at the Central Bank Symposium in Jackson Hole that inflation is a bigger concern than a cooling labor market.Waleed Said, Technical Analyst at GivTrade, said that although the modest rise in jobless claims is not a recession alarm, it does reinforce concerns in a market already questioning how resilient U.S. growth remains.“Gold pushing towards $4,475 shows investors are paying for protection ahead of tomorrow’s non-farm payrolls report, while US futures are holding up because traders still see room for rate relief if labour-market momentum cools further,” he said. “The strategy is not to chase today’s move blindly, but to stay positioned for volatility: labour-market weakness is becoming more valuable to markets than raw growth strength.”Meanwhile, the four-week moving average for new claims—often viewed as a more reliable measure of the labor market because it smooths out week-to-week volatility—came in at 207,250, compared with the previous week’s revised average of 205,750.Continuing jobless claims, which represent the number of people already receiving benefits, were at 1.779 million during the week ending August 22, up from the previous week’s revised level of 1.771 million.

(Kitco News) – The U.S. service sector improved above expectations last month, according to the latest data from the Institute for Supply Management (ISM).The ISM announced on Thursday morning that its Services Purchasing Managers Index came in at 55.4 in August, up from 54.1 in July. The data was better than expected, as economists were looking for a reading of 54.3. Readings above 50 in such diffusion indexes signify economic growth and vice versa. The farther an indicator is above or below 50, the greater or smaller the rate of change.Spot gold was rising once again after coming off the session high of $4,496.01 set around 9 am ET, and last traded at $4,463.57 per ounce for a gain of 1.72% on the daily chart.“In August, the Services PMI registered 55.4 percent, an increase of 1.3 percentage points compared to July’s figure of 54.1 percent,” said Steve Miller, Chair of the ISM Services Business Survey Committee. “The Business Activity Index remained in expansion territory in August, increasing 2.6 percentage points to 61.7 percent from July’s reading of 59.1 percent. The New Orders Index registered 60.9 percent, 3.7 percentage points above July’s figure of 57.2 percent. The Employment Index contracted for a second straight month with a reading of 47.8 percent, a 0.4-percentage point increase from the 47.4 percent recorded in July.”The Supplier Deliveries Index was at 51.3 percent, 1.5 percentage points lower than the 52.8 percent recorded in July. “This is the 21st consecutive month that the index has been in expansion territory, indicating slower supplier delivery performance,” he said. “The Prices Index registered above 70 percent for the fifth time in six months; the reading of 72.6 percent in August is 2.3 percentage points above July’s figure of 70.3 percent,” Miller noted. “The index has exceeded 60 percent for 21 straight months, with its 12-month average increasing by 0.4 percentage point to 68.5 percent, the highest since April 2023.”“Twelve industries indicated growth in August, one fewer than the previous month, while five reported contraction, up one compared to July. The August Services PMI® reading of 55.4 percent is 1.7 percentage points above the 12-month average of 53.7 percent. The uptick of 0.3 percentage point over July’s 12-month average of 53.4 percent marks the eighth straight month that figure has increased.”“Tariffs and the Middle East conflict returned as the most cited issues impacting respondents’ supply chains,” he said. “As a potentially positive sign for employment, there was a slight reduction in the share of companies cutting staff levels, down from 19 percent in July to 17.1 percent in August.”The ISM said 12 industries reported growth in August, one fewer than in July, while five reported contraction, an increase of one from July.

.embed-container { position: relative; padding-bottom: 56.25%; height: 0; overflow: hidden; max-width: 100%; } .embed-container iframe, .embed-container object, .embed-container embed { position: absolute; top: 0; left: 0; width: 100%; height: 100%; }My September 3 read separates the expected retrace from what comes next: BTC and ETH are approaching their Fast lines, lower-cap breadth is improving, OTHERS has a two-way close, USDJPY needs confirmation, oil is at a conditional short area, and many ALTs have bounce setups without a blanket bullish confirmation.BTC approaches its support-fan decisionBitcoin TetherUS daily Binance chartI expect BTC to close below the 0.786 Fibonacci Retracement level and bounce from the Fast line just under $75k. The 0.618 Fib is the more significant support after that. I am not treating the expected dip as the final answer, because what happens after the retrace matters more.TOTALE50 shows stronger lower-cap breadthTOTALE50 daily CRYPTOCAP chartI see TOTALE50 looking strong, with OBV moving up hard and its moving average now turning up into a bullish trend. I keep that separate from TOTALE100, which remains in bullish consolidation inside its Cloud, and from OTHERS.D, where dominance is market share, not spot price.OTHERS has a two-way closing triggerOTHERS daily CRYPTOCAP market-cap chartI see Wednesday's drop in TBO Resistance as a double-edged sword. If OTHERS market cap closes above that level, I have a strong uptrend. If it cannot, I expect OTHERS to drop into its Cloud. This is OTHERS market cap excluding the top 10, not OTHERS.D dominance.USDJPY needs a close below 158.203USDJPY daily OANDA chartI see USDJPY below the Cloud, which is constructive for the bearish thesis, but the pair has still made higher lows since August 3. I need a close below Wednesday's low at 158.203 before I say the pain train has started.Oil near $91 is a conditional short setupLight crude oil futures daily NYMEX chartI still like the short setup as oil approaches $91: daily RSI is overbought and price is near resistance. I also know US-Iran developments can flip the market quickly, so I am treating this as a setup rather than a guaranteed reversal.DOGE represents the broader ALT bounce setupDogecoin TetherUS daily Binance chartI see a short-term bounce in play for many ALTs even though many remain in bearish consolidation inside their Clouds. Lower highs since August 22 have coiled price, and a quick pop could ignite short-squeeze liquidations. DOGE is one example. I am not extending that view to charts such as DOG that already pumped and had their chance.Learn my strategies and the tools I use every day by visiting The Complete Cryptocurrency Investor by Mastering Assets.

(Kitco News) - Gold investors may have to endure more volatility as markets continue to wrestle with stubborn inflation and the prospect of higher interest rates, but one fund manager says the market is focused on the wrong question.In an interview with Kitco News, Eric Strand, Founder of AuAg Funds, said it is only a matter of time before gold resumes its long-term uptrend as investors recognize that higher interest rates will do little to address the forces actually driving inflation.Strand said markets have positioned themselves for higher interest rates, which has supported the U.S. dollar and created headwinds for gold. However, he argued that investors are simply reacting to elevated inflation without looking closely enough at what is causing prices to rise.Strand explained that higher commodity and input costs are driving inflation rather than excessive consumer demand.“Raising rates in a cost-push inflation doesn't have any effect. It doesn't take inflation down,” he said. “It's not like consumers are buying too much [and] you want to cool it down. You're just putting another cost on top of everything else.”Although gold has struggled as investors price in the possibility of tighter monetary policy, Strand said bearish positioning could ultimately provide the fuel for the precious metal’s next move higher.Strand said his strategy amid the volatility remains relatively simple: wait for the market to recognize its mistake.“We just wait,” he said. “Wait it out and prices will come back.”At the same time, Strand said he remains skeptical that the Federal Reserve will be able to follow through on its hawkish rhetoric. He described the central bank's stance as essentially “all talk, no action,” arguing that policymakers have little choice but to project inflation-fighting credibility even if economic and fiscal conditions ultimately prevent them from meaningfully tightening monetary policy.The bigger problem, according to Strand, is the U.S. government's mounting debt burden.With federal debt surpassing $40 trillion, Strand said the government increasingly needs lower long-term borrowing costs simply to keep debt-servicing expenses manageable. That dynamic, he argued, will eventually overwhelm the Federal Reserve's inflation-fighting rhetoric.“They need lower rates on this long rate,” he said. “For me, it's very obvious that they will need to do QE, or whatever they will call it.”Strand said the government's broader objective of growing its way out of its debt problem is also fundamentally inconsistent with substantially tighter monetary policy.“If you want to grow the economy, you cannot raise rates and make people not consume. You have to really have the pedal to the metal,” he said.Strand added that inflation itself could ultimately become part of the solution to the debt problem because rising nominal economic activity reduces the real value of existing liabilities.“They will have to give up,” he said. “Inflation helps them to get rid of the debt.”Strand expects the Federal Reserve to resist that reality for as long as possible, but he said policymakers will ultimately be forced to follow the Treasury's lead as the government seeks to contain long-term borrowing costs.“The Fed will wait. They will wait until they must,” he said.Strand's comments come as investors increasingly focus on the long end of the Treasury market, where elevated yields have complicated the government's efforts to finance persistent deficits.He argued that deteriorating demand for U.S. government debt will ultimately force policymakers toward renewed quantitative easing or another mechanism designed to suppress longer-term yields — effectively a form of yield-curve control.For gold, Strand said this shift would be the catalyst for a much larger move.While markets may continue to react to every inflation report and every change in interest-rate expectations, Strand said investors should instead focus on the structural forces that monetary policy cannot easily fix: higher commodity costs, rising demand for metals, massive government debt and the growing need to keep borrowing costs contained.He said August's rally offered a small preview of what could happen when investors are eventually forced to unwind positions built around expectations for higher rates and a stronger U.S. dollar (Kitco Global Index shows how much of today's gold move is the dollar versus the gold market itself.).Gold gained roughly 10% in August, but Strand said moves of that magnitude could pale in comparison with what comes next.“It can easily go up 20, 30% the rest of the year,” he said. “When we start to see that the Fed has been all talk and no action ... you will have to start to change your positions.”For investors who missed the earlier stages of gold's rally, Strand said the recent correction should be viewed as another opportunity.“This is a second chance,” he said. “If you don't go in, you will miss it again, and you will be left at the station again.”Strand remains particularly bullish on precious-metals miners. Despite their strong performance, he said valuations remain attractive relative to underlying commodity prices, while years of higher gold and silver prices have strengthened company balance sheets and reduced financial risk.He noted that even after their recent gains, miners are cheaper relative to commodity prices, while limited exploration and a lack of new mine development continue to constrain future supply.“It's a fantastic situation,” he said. “We don't find more gold, we don't find more silver.”Ultimately, Strand said the investment case extends well beyond short-term Federal Reserve policy. A weaker dollar, mounting U.S. debt, constrained mine supply and rising demand for metals across defense, artificial intelligence and infrastructure are creating a powerful structural backdrop.“The dollar is not going to get stronger, and they will have to print more just to service the debt and the price of debt,” he said. “We don't get so much metal out of the ground, and we need so much more metal in the system.”For Strand, the question is therefore less about whether gold moves higher and more about when markets recognize that interest-rate hikes cannot solve the problems driving inflation — and that the Federal Reserve may ultimately have little choice but to accommodate the government's growing debt burden.See live precious metals prices for gold, silver, platinum and palladium — in USD, CAD and 12 more currencies.

(Kitco NewsWire) - Spot gold and silver prices are sharply higher in late-afternoon U.S. trading Thursday, as Fed Governor Christopher Waller’s less-hawkish rate comments pulled Treasury yields lower, weakened the U.S. dollar and gave precious metals room to extend Wednesday’s rebound. At the time of writing, spot gold was trading near $4,471.10 an ounce, up 1.92%, while spot silver was trading at $66.830, up 2.49% on the session.North American equity markets closed sharply higher as technology shares led a broad risk rebound. The S&P 500 rose 81.11 points, or 1.1%, to 7,747.71, the Dow Jones Industrial Average gained 624.16 points, or 1.2%, to 53,686.11, and the Nasdaq Composite added 366.23 points, or 1.4%, to 26,584.06. European markets also finished higher, with the STOXX Europe 600 up 0.49% to 649.10. London’s FTSE 100 rose 0.70% to 10,831.52, Germany’s DAX gained 0.63% to 26,003.32, France’s CAC 40 added 0.07% to 8,286.40 and Italy’s FTSE MIB rose 0.88% to 52,245.47.The latest positioning shifted back toward a Fed pause after Waller said he would be inclined to keep rates unchanged if next week’s inflation data continue to cool. September hike odds fell to about 50.4% from 63.2% Wednesday, while the two-year Treasury yield slid to 4.34% and the 10-year yield dropped to 4.77%. The services data were not uniformly dovish: the ISM services index rose to 55.4 in August from 54.1, prices paid climbed to 72.6, the highest reading since October 2022, and employment remained in contraction at 47.8. That mix leaves Friday’s August nonfarm payrolls report and the Sept. 11 CPI release as the next two decisive inputs for Fed pricing. For gold, the signal is constructive but conditional: lower yields and a softer dollar support the rebound, while firm services demand and sticky input prices keep the inflation channel alive.Precious metals rallied because the yield shock paused, not because the inflation problem disappeared. Gold bounced from Wednesday’s $4,281.70 low, traded as high as $4,511.70 and moved back toward the $4,489.87 to $4,538.77 retracement band flagged in the latest technical work. Silver pushed to $67.60 before easing, reclaiming the $66.00 decision level but still stopping short of the more important $67.21 to $68.74 resistance ladder. The short-term setup now depends on payrolls: a softer report would validate the Waller pause trade, while a firmer jobs and wage print would put the dollar and front-end yields back in control.The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations and defensive demand, but Thursday’s market impact was smaller than earlier in the week. Iran fired at Kuwait in retaliation for U.S. bombardments, and fighting has intensified since U.S. strikes hit Iranian rocket launchers on an island in the strait. Oil ended little changed after an early rise, with WTI settling at $91.30 a barrel and Brent at $95.52. For gold, the setup remains supportive but conflicted: Hormuz risk keeps a defensive bid under bullion, while crude near six-week highs sustains inflation pressure and limits how far Fed-rate relief can run.The key outside markets see Nymex WTI crude oil prices firmer and trading around $91.30 a barrel, while Brent crude was near $95.52. The yield on the benchmark 10-year U.S. Treasury note is trading near 4.77%. The U.S. dollar index is softer. (Kitco Global Index shows how much of today's gold move is the dollar versus the gold market itself.)Technically, spot gold bulls' next upside price objective is to push prices back above the $4,489.87 resistance level, with a sustained move targeting $4,532.67 and then $4,538.77. Bears' next near-term downside price objective is a break below $4,369.00, with deeper downside targets at $4,301.00 and then $4,263.00. First resistance is seen at $4,489.87 and then at $4,532.67. First support is seen at $4,369.00 and then at $4,301.00.Spot silver bulls' next upside price objective is to drive prices back above $67.21, with a move above that level targeting $68.74 and then $72.08. The next downside price objective for the bears is a break below $65.26, with deeper downside targets at $63.70 and then $62.57. First resistance is seen at $67.21 and then at $68.74. Next support is seen at $65.26 and then at $63.70.See live precious metals prices for gold, silver, platinum and palladium — in USD, CAD and 12 more currencies.

(Kitco News) – While the U.S. Treasury Department has made massive waves with their two recent interventions – one targeting the yen, and the other long-term yields – these did next to nothing to solve the real problems plaguing the dollar and the debt, and gold will be the inevitable beneficiary, according to Adrian Day, president of Adrian Day Asset Management.Day said that while Bessent’s announcement made headlines around the world, it had surprisingly little lasting impact in the one area it was supposed to.“It didn't really do much for Treasuries at all, did it?” he said. “Just like the yen intervention at the end of July that didn't really do much to the yen [beyond] a couple of days. And it's interesting that August was bookended by those two interventions.”Day said the recent announcement was a little bit puzzling, because there was already an existing program from the Yellen years to buy back long bonds, and Bessent announced that they were going to at least double it.“If you look at the number, $4 billion that's really not an enormous amount of buybacks in the context of the Treasury market,” Day said. “To me, and to the market, what's more important is the direction of travel. And I think the fact that Bessent actually announced it is a little bit odd, because if it's nothing more than a continuation of the existing program meant to help manage the liquidity on the long end, why make a big deal out of it?”“But the fact is that Bessent made a big deal out of it, and so I think the market is right to make a big deal out of it.”Day said the reasoning behind the ramped-up buybacks also didn’t make sense. “Was the Treasury thinking that in announcing that they were going to double the program, that they would somehow get more participants active in the long end? It's really peculiar,” he said. “Bessent said that the idea of the program was to add liquidity to the long end. That's really puzzling, because if the treasury is buying back and canceling, you're actually reducing the liquidity, and in the short term, in the immediate term, you're helping holders who want to sell.”Day said these buybacks also won’t reduce the overall supply of treasuries, because Treasury is issuing against them.“As everybody knows, the buybacks that the Treasury did at the long end were offset by increased issuance at the short end,” he said. “So you're not reducing the market supply, which would help on the demand side. The problem with the Treasury market – and I'm talking about the Treasuries from [10-year] to 30-year – we have far too much supply and an increasing supply, and we don't have enough willing buyers. And we have, it would appear, a declining number of the traditional buyers.”Day said this is the fundamental problem that drove the yen intervention as well. “If the yen moves up, then that encourages domestic holders not to sell their treasuries; that was the purpose of the yen intervention,” he said. “But that is the fundamental problem that the Treasury is facing – and it's facing it not only under Trump, but it's an increasing problem that's been going on for years and years now.”He pointed to Russia no longer buying treasuries after they were locked out of the dollar system since the Ukraine war. “China is obviously reducing their holdings of treasuries,” he noted. “And the Japanese government was selling their treasuries in May and June, before this intervention.”Day said the important thing in Bessent’s announcement was not the $4 billion minimum, but the absence of a maximum.“It's at least double,” he said. “So the sky's the limit. I think the idea, in both instances, was to get the thing kickstarted and to send a message. But as with most interventions, surely we found over fifty years that currency interventions rarely work for more than a very short period of time, unless you are willing to continue to put increasing amounts of money behind it.”Turning to gold, Day said gold’s reaction to the U.S. government’s interventions was predictable, but like the impact on the currency markets, it was relatively short-lived.“With gold, we saw a rally – again, bookended by these two interventions,” he said. “But it shouldn't surprise us that we've had a pullback after that.”Firstly, Day pointed out that any time you have a market go up 14% or 15% percent in a month, you should expect some kind of pullback. “Secondly, Warsh's speech at Jackson Hole,” he said. “Anytime you have a big market run-up, then people are looking for reasons, triggers to take profits. And I think, frankly, whatever Warsh had said, that was going to be a reason to take some profits, unless he had come out and said, ‘Ah, forget about it. Inflation doesn't matter. We're going to ease rates.’”Then oil and the dollar both rallied on the latest round of conflict between the U.S. and Iran. “All of that contrived to make gold look really quite weak,” Day said. “But the fundamental issue is, how do we service our debt, and how do we sell these bonds? That remains the issue.”“And until that issue is resolved, gold has support.”Looking ahead, Day said the war is critical in the short term, because the impacts on the global oil supply, prices and inflation are very real and concrete. But he also believes the U.S. government interventions are sending the exact opposite signal of the one intended, and gold will be the ultimate beneficiary.“When you do an intervention, yields go up, the dollar goes up, negative for gold,” he said. “But wait a minute… the intervention is a reflection of weakness: Incredibly bullish for gold.”“If the U.S. can't sell its bonds at a reasonable price, that is incredibly bullish for gold, because whatever we would like to happen, they're not going to cut spending sufficiently, they can't raise taxes sufficiently. What is going to happen is the Fed is going to continue to intervene and buy the bonds – it has to, because there is no other buyer – and the dollar is going to drop in reaction to that.”See live precious metals prices for gold, silver, platinum and palladium — in USD, CAD and 12 more currencies.

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