{"id":53486,"date":"2026-09-02T12:03:46","date_gmt":"2026-09-02T12:03:46","guid":{"rendered":"https:\/\/www.vtmarkets.com\/en-latam\/uncategorized\/the-fed-isnt-cutting-so-why-is-gold-rallying-anyway\/"},"modified":"2026-09-02T12:03:46","modified_gmt":"2026-09-02T12:03:46","slug":"the-fed-isnt-cutting-so-why-is-gold-rallying-anyway","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-latam\/featured\/the-fed-isnt-cutting-so-why-is-gold-rallying-anyway\/","title":{"rendered":"The Fed Isn\u2019t Cutting. So Why Is Gold Rallying Anyway?"},"content":{"rendered":"\n
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Gold has traditionally had a close relationship with Federal Reserve policy. When interest rates fall, the opportunity cost of holding a non-yielding asset such as gold tends to decline, while lower rates can also weigh on the US dollar and support demand for precious metal. Higher rates can have the opposite effect by making bonds more attractive and supporting the dollar.<\/p>\n\n\n\n

Yet that relationship is becoming less straightforward. Gold recently rallied towards $4,700 even as investors continued to debate whether the Federal Reserve could raise interest rates again. The latest catalyst did not come from the Fed, but from the US Treasury. To navigate these macro shifts, traders often monitor live technical charts and historical levels through our XAU\/USD price forecast and analysis<\/a>.<\/p>\n\n\n\n

Treasury Secretary Scott Bessent announced plans to at least double the size of certain long-term Treasury bond buybacks. Then, according to a CNBC report, senior Treasury officials said the government could potentially use part of its near-$1 trillion Treasury General Account to help fund those purchases.<\/p>\n\n\n\n

That raises a new question for gold traders: Can Treasury push long-term yields lower and support gold even if the Fed keeps interest rates high?<\/strong><\/p>\n\n\n\n

Treasury Is Targeting Long-Term Yields<\/h2>\n\n\n\n

The story begins in the US bond market, where long-term yields have risen sharply. The 30-year Treasury yield recently reached 5.33%, around its highest level in 19 years. Higher long-term yields increase government borrowing costs while also influencing mortgage rates, corporate financing and valuations across financial markets.<\/p>\n\n\n\n

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To better track these fixed-income dynamics, see our guide on how to read the 10-year Treasury yield chart<\/a>.<\/p>\n\n\n\n

Treasury has responded by increasing purchases of older, long-dated government bonds. Under the expanded programme, the maximum size of liquidity-support buybacks in the 10-to-20-year and 20-to-30-year maturity sectors will rise from $2 billion to at least $4 billion per operation, with Bessent also indicating that purchases could become larger.<\/p>\n\n\n\n

The basic mechanism is straightforward: Treasury buys existing bonds, increasing demand and potentially pushing bond prices higher. As bond prices rise, yields tend to fall, which could ease pressure at the longer end of the yield curve without requiring the Federal Reserve to change its policy rate. Traders looking to capitalize on fixed-income price swings can check our guide to trading bond CFDs<\/a>.<\/p>\n\n\n\n

Treasury action<\/td>Potential market effect<\/td><\/tr>
Buy long-term Treasury bonds<\/td>Demand for existing bonds increases<\/td><\/tr>
Higher bond demand<\/td>Bond prices can rise<\/td><\/tr>
Higher bond prices<\/td>Long-term yields can fall<\/td><\/tr>
Lower yields<\/td>Gold’s opportunity cost can decline<\/td><\/tr>
Lower yields and weaker dollar<\/td>Gold can receive additional support<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

The possibility of using TGA cash makes the strategy more significant because it could give Treasury greater flexibility to increase purchases.<\/p>\n\n\n\n

The TGA Gives Treasury More Flexibility<\/h2>\n\n\n\n

The Treasury General Account, or TGA, is effectively the US government’s main cash account at the Federal Reserve. Tax receipts and proceeds from government borrowing flow into the account before being used to meet federal spending obligations.<\/p>\n\n\n\n

Treasury expects the TGA balance to be around $950 billion at the end of September and estimates that it could temporarily reach approximately $1.05 trillion in late October. Senior Treasury officials have indicated that some of this cash could potentially be used to help fund purchases of older Treasury securities, although no decision has been announced on how much would actually be deployed.<\/p>\n\n\n\n

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The yields on the longest-dated US government bonds shot back to levels seen just before Treasury Secretary Scott Bessent shocked markets last month by expanding a buyback program in an effort to halt the rise https:\/\/t.co\/UCBIrLq9Xe<\/a><\/p>— Bloomberg (@business) September 2, 2026<\/a><\/blockquote>