Gold and Silver Rally Despite What Textbooks Predict

Two of gold’s traditional headwinds were very active today: an AI-driven equity selloff and a surge in Treasury yields to near two-decade highs. Yet gold and silver moved higher despite those pressures. Several clear developments help explain this apparent disconnect: the actual intraday price action, a policy intervention by the U.S. Treasury in the long-end market, a reaffirmed fiscal milestone for the United States, contrasting investor behavior across regions, and fresh evidence that miners are profiting handsomely from the rally.

Why are gold and silver up today despite an equity selloff and rising yields?

As of this afternoon, gold is trading around $4,462.87 per ounce, up roughly 2.9% on the day, while silver sits near $65.24, rising close to 2.9% as well. Those gains held even as equities came under pressure and long-term Treasury yields climbed to levels not seen in nearly 20 years. Typically, rising yields and a risk-off equity move would weigh on non-yielding metals like gold. However, the current price action reflects nuances that make a simple “yields up equals gold down” narrative incomplete. In particular, the domestic dollar spot price and the market response to a Treasury liquidity move are important context for why the metals advanced today.

Why is the US Treasury doubling its long-bond buyback size?

The U.S. Treasury announced an increase in its long-end liquidity-support buybacks, raising the per-operation cap for 10- to 30-year debt from $2 billion to at least $4 billion beginning September 9. Market participants have described the program expansion as a form of “mini QE,” since the Treasury will be stepping in as a larger buyer of long-duration issuance. The decision reflects the market’s recent difficulty absorbing the supply of long-term Treasuries, and it undercuts a simple interpretation that a rise in yields is solely a bullish signal for the dollar or bearish for gold. In this case, the yield spike itself appears to be partly a symptom of a market the Treasury judged needed intervention, which changes the implications of higher yields for asset allocation.

Is the US national debt still above 100% of GDP?

Yes. Recent data reconfirm that U.S. federal debt remains above 100% of GDP. The Council on Foreign Relations noted that U.S. national debt stood near $39.7 trillion in July, keeping the debt-to-GDP ratio above the century mark. That level is not new this month; federal debt held by the public first crossed the 100% threshold earlier in the year. Observers often cite the global demand for U.S. Treasuries — sometimes called an “exorbitant privilege” — as a factor that helps keep U.S. borrowing costs lower than they would otherwise be, even as the absolute debt burden grows. Comparisons with recent debt stress in other countries are offered as cautionary studies rather than direct forecasts for U.S. outcomes.

Are investors buying gold or selling it right now?

Investor flows are mixed by region. In India — one of the largest physical gold markets — some investors appear to be taking profits after July’s roughly 9% price rise, rotating gains into cash rather than immediately reinvesting. That pattern reflects local profit-taking rather than a confirmed global sell-off. Conversely, U.S. ETF flows show strong demand: SPDR Gold Shares (GLD), the largest physically backed gold ETF, recorded nearly $950 million of net inflows on August 18 alone, making it one of the largest single-day creations among U.S.-listed ETFs that day. GLD’s assets under management rose to about $154.7 billion. Put simply, different investor bases are reading the rally differently — some locking in profits, others increasing exposure.

How profitable is the gold rally for mining companies right now?

The recent price rally has translated into substantial earnings gains for producers, even where output growth has been modest. For example, South African tailings-retreatment miner DRDGOLD reported fiscal 2026 results showing headline earnings up 89% to R4.25 billion on a roughly 40% increase in the average Rand price received for gold. Revenue rose about 42% to R11.2 billion, and the company declared its 19th consecutive year of dividend payments. DRDGOLD is also investing in a R10 billion capital program to extend mine life through 2028 and beyond. These results underline a key point: current gold market economics are being driven mainly by higher prices rather than large increases in physical supply.

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SOURCES
1. U.S. Department of the Treasury — Treasury Announces Increased Sizes of Nominal Long-End Liquidity Support Buybacks Beginning September 9
2. Council on Foreign Relations — Global Debt Crises Foreshadow a Perilous Path for the United States
3. ETF.com — Daily ETF Flows: Nearly $1B Flows Into GLD
4. Free Press Journal — Gold’s 9% Surge Drives Increased Inflows Into Cash and Debt Securities, Report Says
5. Mining Weekly — DRDGOLD Free Cash Flow Up 85% to R2.3bn
6. Business Day — Gold Price Surge and Careful Cost Control Lift DRDGold’s Earnings
7. GoldSilver — Live Gold and Silver Price Charts

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions.

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