Gold hits 3-month high as Treasury buybacks weaken dollar
Why it matters: Bitcoin neared $80,000 and the dollar index fell to a three-month low as deficit fears revived the "debasement trade."
Gold climbed to its highest level since mid-May after the US Treasury unexpectedly increased buybacks of long-dated government debt, a move that pushed the dollar lower and revived worries about the country’s fiscal path. Bullion rose more than 5% last week and has gained for five straight weeks, while Bitcoin also rallied sharply and briefly approached $80,000. Investors have framed the shift as a return of the “debasement trade,” in which money moves out of the dollar and into assets seen as better hedges against inflation, debt and policy risk. The Treasury last week doubled the maximum size of its bond buyback program to at least $4 billion from $2 billion as long-term borrowing costs climbed.