The push toward $5,000 gold is accelerating as US Treasury liquidity operations, a weakening dollar, and fiscal anxiety converge. Morgan Stanley now sees gold above $5,000 per ounce by 2027, after the metal reached its prior fourth-quarter target of $4,450 earlier than expected.
The latest catalyst came from Treasury Secretary Scott Bessent's announcement that the Treasury will at least double maximum liquidity-support buybacks for 10- to 30-year securities, from $2 billion to at least $4 billion per operation beginning September 9. That initially pushed long-dated yields lower and weakened the dollar, although yields have since rebounded. The 10-year yield was near 4.7% and the 30-year around 5.25% on Friday.
Spot gold traded near $4,540 an ounce in Asian hours after hitting its highest level since early June. US gold futures advanced toward $4,594. Central bank buying remains a structural support: Morgan Stanley said China added 60 tons this year, the most since 2023, while Poland added 82 tons to reach 632 tons in total holdings. ETF flows also turned positive, with 70 tons added in July and August after 93 tons of outflows in May and June.
The Federal Reserve remains the main constraint. July meeting minutes showed policymakers are still concerned about inflation and open to raising rates if progress toward the 2% target stalls. Initial jobless claims fell to 206,000, reinforcing that the labor market has not cracked. Markets still favor no change at the September meeting, but a rate hike is not off the table.
Citi strategist Dirk Willer said the renewed debasement trade strengthens the case for gold, with fiscal concerns, a softer dollar and unstable long-term rates supporting demand for scarce assets. Citi also flagged scope for bullion to reach $5,000 to $6,000 over the next year. The US federal debt has moved above $40 trillion, intensifying fiscal risk concerns.
For crypto markets, the macro backdrop matters. Dollar weakness, fiscal debasement concerns, and the Treasury’s liquidity support are historically signals that can boost demand for Bitcoin as a scarce, non-sovereign asset. However, the Fed’s hawkish lean and rebounding long-end yields could limit upside across risk assets, including digital assets.
