(Kitco News) – Gold and silver are enjoying resurgent demand following the U.S. Treasury Department’s latest intervention in the bond market, while the appetite for the metals in Asia continues to rise, according to precious metals analysts at Heraeus.
In their latest update, the analysts noted that gold prices rallied through resistance to reach their highest levels since early June last week.
“Gold prices topped $4,600/oz on 21 August as prices once again moved higher after a couple of weeks of consolidation,” they wrote. “This mirrors the early-August rally where gold prices rose around 7%, after having spent the whole of July in a tight range near their yearly lows around $4,000/oz.”
The U.S. Treasury’s announcement that they would double their buybacks of long-dated T-bills to total at least $14 billion in additional purchases between September 9 and November 4 was the catalyst for the latest move higher.
“The market reaction was concentrated at the long end of the yield curve and was supportive for gold,” they said. “The 10-year Treasury yield fell by around 6 bps to 4.65% following the announcement, while the 30-year yield dropped by almost 10 bps to around 5.19%. By contrast, the two-year yield was little changed at around 4.18%, suggesting that near-term expectations for Federal Reserve policy had shifted relatively little. Some of the reduction in bond yields has since reversed, with the 10-year and the 30-year yields remaining near their year-to-date highs.”
The analysts noted that the U.S. dollar also weakened in the wake of the announcement, with the dollar index falling to around 98.8. (Kitco Global Index shows how much of today's gold move is the dollar versus the gold market itself.)
“Lower Treasury yields reduced the relative attraction of government bonds, while the weaker dollar provided additional support to gold,” they said. “However, as the larger buybacks do not begin until September, the immediate reaction appears to have reflected the signal from the Treasury as much as the additional purchases themselves, and the support to gold could prove temporary if long-term yields rise back significantly.”
On the sovereign side, the Bank of Korea (BoK) completed a significant gold investment – its first in 13 years.
“Over the course of Q2’26 the BoK purchased 679,765 shares of SPDR Gold Shares worth around $250 million,” the analysts wrote. “Based on the amount of gold represented by each share, the position is equivalent to exposure to roughly 62 koz, (~1.9 tonnes) of gold. The BoK’s physical gold reserves have remained unchanged at around 104.4 tonnes since 2013. Although the move does not increase the BoK's physical holdings, it indicates a renewed interest in gold exposure.”
“Separately, the bank has announced that it will establish a framework to purchase domestically refined gold, which could eventually allow the metal’s share of reserves to increase,” they added.” This would follow a trend seen globally where the proportion of central bank reserves held in gold is rising compared to those held in Treasuries.”
Spot gold was trading near session highs shortly after the North American open, and last traded at $4,662.71 for a gain of 1.30% on the session.
Turning to silver, Heraeus analysts said Indian silver imports have begun to recover after falling precipitously under the country’s new import regime.
“Around 90 tonnes (2.9 moz) of silver has been imported through the India International Bullion Exchange so far in August, following six months without imports through the exchange,” they wrote. “Additional documentation requirements continue to slow shipments after India introduced licensing requirements for silver imports in May. This has contributed to total imports falling well short of those in prior years.”
The shortage that resulted pushed domestic premiums higher, which ultimately incentivized traders to obtain the necessary licenses to bring metal into the country. “Further arrivals should ease the physical tightness, particularly as jewellers begin restocking ahead of the festival and wedding season,” the analysts said. “Even with imports on the rise, total imports into India in H2 will have to be more than double the ~57 moz recorded in H1 in order to reach the ~212 moz imported during 2025.”
Silver’s price action followed gold’s last week as prices rallied in the wake of the Treasury announcement.
“The silver price briefly touched $70/oz last week to its highest level since mid-June,” Heraeus said. “The recent pick-up in momentum was weakening at the start of the week with silver falling to ~$62.5/oz. However, with the announcement of increasing Treasury buybacks, silver followed gold to turn green on the week eventually rising close to 7%.”
“While the current rally has propelled precious metals to their highest prices for a couple of months, in order for it to be sustained, real yields would have to resist pressure on Federal Reserve policy from rising oil prices and volatility in the bond markets which is likely to remain elevated following Wednesday’s announcement.”
Silver prices were pulling back sharply following the equity open on Monday morning after trading as high as $69.920 per ounce.
Spot silver last traded at $68.914 per ounce for a slight loss of 0.08% on the daily chart.
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