After months‑long correction that sent prices down 30% from all‑time highs, the gold market is drawing robust buying interest this week. Gold opened and pushed toward $4700 per ounce, now trading at a 15‑week high. Analysts say bets on the “debasement trade” are heating up again after the U.S. Treasury announced plans to buy long‑dated Treasuries in an effort to lower borrowing costs.

U.S. Fiscal Worries Fuel Safe‑Haven Demand

In a Friday report, Bart Melek, Global Head of Commodity Strategy at TD Securities, stated that worries over U.S. fiscal health are lifting gold and silver after U.S. national debt topped $40 trillion last week. He noted that, based on signals from the U.S. Treasury, market participants expect government intervention in the bond market could turn “more aggressive”. Against this backdrop, gold may keep benefiting from U.S. dollar weakness.

So far, however, the Treasury Secretary Bessent’s planned bond buybacks have had limited impact on the long end of the yield curve. Data shows the 30‑year Treasury yield stands at 5.23%, while the 10‑year yield is around 4.70%. Separate reports indicate the U.S. Treasury could tap nearly $1 trillion held in its General Account to fund the bond‑buying programme.

Oil‑Price and Inflation Risks Act as Constraints

Though TD Securities holds a bullish view on gold, Melek warned that rising energy prices are stoking inflation fears and could pose headwinds for bullion. He said that as crack spreads soar alongside crude‑oil prices, the market cannot rule out Federal Reserve rate hikes, since peRSIstent oil‑price shocks lift inflation expectations. “At this stage, it is too early to rally all the way to our $5350‑per‑ounce target,” he commented.

In another report released Friday, Nicky Shiels, Head of Metals Strategy at MKS PAMP, said the “debasement trade” still has huge potential to drive gold if last year’s pattern repeats. This sentiment is evolving into a structural theme and may trigger stronger FOMO‑driven buying among retail investors, she argued.

Institutions Back the Long‑Term Thesis

Shiels also pointed out that even if gold looks tactically overbought in the short run, it can still perform well amid lingering high‑rate risks. Gold remains the “cleanest” hedge against debasement, as well as the “cleanest” hedge against U.S. political intervention.

“One authority leans toward tightening while the other leans toward eASIng, yet both target the same yield curve,” she said. She added that even with a relatively low bar for Fed rate hikes, Brent crude near $94 per barrel, tight diesel and refined‑product markets, and widening crack spreads act as independent drivers of inflation expectations. Even if the Treasury succeeds in suppressing nominal yields, real yields, inflation breakevens and inflation expectations can still rise on the back of energy‑market developments, delivering fresh support for gold rooted in inflation rather than purely the debasement narrative.

How Wall Street Interprets This Rally

JPMorgan commodity analysts describe gold’s rally since last year as a “debasement trade”. They noted broad global diveRSIfication away from the U.S. dollar in the second half of 2025 propelled gold to a record high of $5600 per ounce back in January.

The Kitco Global Index underscores market focus on how much of gold’s current move stems from dollar dynamics versus internal forces within the gold market itself.

Overall, gold is getting short‑term support from U.S. fiscal anxiety, expectations of dollar weakness and market interpretations of government bond‑market intervention. Still, inflation pressure from rising oil prices and uncertainty over Fed policy mean this rally is not risk‑free. For traders, whether gold can sustain its upside breakout hinges on the interplay of three variables: fiscal conditions, interest rates and energy markets.