Treasury Secretary Scott Bessent's announcement to more than double bond buybacks from $2 billion to at least $4 billion is seen as a catalyst for gold prices, according to Deutsche Bank analyst Michael Hsueh. He noted that this policy change could drive gold above his target price of $4,800 an ounce, representing a nearly 3% increase from its recent settlement.
Following the announcement, gold prices rose over 1% in Monday's trading session and have gained more than 5% over the past week, marking the longest weekly advance since last October. Hsueh emphasized that the Treasury's intervention underscores the importance of policy moves on hard assets like gold.
Additionally, Ray Dalio, founder of Bridgewater Associates, advised investors to maintain a significant allocation to gold—between 10% to 15% of their portfolios—as a hedge against potential debt crises linked to government borrowing.
The recent rally in gold is attributed to a combination of easing monetary policy, increased central bank purchases, and substantial inflows into gold-related exchange-traded funds