Gold and Silver Rise as U.S. Debt Tops $40 Trillion and Treasury Secretary Scott Bessent Announced Plans to Double Buybacks of Longer-Dated Government Debt
- Gold and silver finished the week higher, with the precious-metals market gaining momentum as attention turned toward U.S. debt-management policies and renewed government support for the Treasury market.
- Silver closed the week at $68.81 an ounce bid, maintaining its strength as investors continued to weigh fiscal pressures, government borrowing and the outlook for hard assets.
- Gold ended the week at $4,608 an ounce bid, while the gold-to-silver ratio slipped to roughly 66, putting the closely watched ratio near what the market update characterized as an important technical level.
- Professional investors continue to see potential value in gold, with the latest Bank of America fund-manager polling cited in the update indicating that major financial managers view gold as relatively undervalued compared with other asset classes.
- U.S. national debt crossed the historic $40 trillion threshold, reaching approximately $40.05 trillion on August 18—more than double its 2017 level—as persistent spending deficits continue to increase federal borrowing requirements.
- Rising debt-servicing costs are becoming an increasingly important part of the fiscal picture, with the update noting that the federal government now spends more servicing its debt than it does on either national defense or Medicare.
- Treasury Secretary Scott Bessent moved to accelerate government debt buybacks, with the Treasury announcing plans to double buyback activity in longer-dated securities, particularly the 10- to 30-year portion of the market, shortly after federal debt surpassed $40 trillion.
- The bond market's initial response proved short-lived. The 10-year Treasury yield was around 4.68% before the buyback announcement and initially declined, but longer-term yields subsequently rebounded, with the 10-year moving back above its pre-announcement level by Friday.
- Bessent defended the Treasury's actions as an effort to restore equilibrium and liquidity, arguing that short-term bond-market moves amount to "noise" and expressing confidence that fiscal consolidation and stronger economic growth could eventually ease pressure on yields.
- The broader precious-metals story remains closely tied to America's fiscal trajectory. Bessent argued that the U.S. can “grow our way out” of its debt burden and suggested the deficit may have peaked, while the combination of $40 trillion in debt, elevated Treasury yields and expanding debt-management measures provides an important macro backdrop for gold and silver markets.
U.S. debt surpasses $40 trillion as Treasury Secretary Scott Bessent defends accelerated bond buybacks and outlines the government's strategy for fiscal consolidation and economic growth.
Gold and Silver Finish the Week Higher
Gold and silver prices moved higher last week as precious metals markets reacted to growing concerns surrounding U.S. government debt and developments in the Treasury market.
Silver price finished the week at $68.81 per ounce bid, while gold price closed at $4,608 per ounce bid. The gold-to-silver ratio ended the week slightly lower at approximately 66, placing it near a level highlighted in the market update as technically important.
Gold is also attracting attention among professional money managers. According to the latest Bank of America fund manager polling cited in the market update, major financial managers continue to view gold as relatively undervalued compared with other asset classes.
U.S. National Debt Surpasses $40 Trillion
The biggest macroeconomic development of the week came from Washington, where the U.S. national debt officially surpassed $40 trillion.
Treasury Department data cited in the market update showed federal debt reaching approximately $40.05 trillion on August 18, more than twice its 2017 level. Government spending continuing to exceed revenue has required additional borrowing, while the growing debt stock is also increasing the government's interest expense.
According to the update, the federal government now spends more servicing its debt than it does on either national defense or Medicare. That dynamic illustrates how higher borrowing costs can compound the fiscal challenge as existing debt must be serviced while new deficits require additional financing.
The update also draws a historical comparison with World War II, noting that while U.S. debt levels relative to the economy were similarly elevated during that period, roughly half of the Treasury market was backed by gold at the time.
Treasury Accelerates Government Debt Buybacks
Against that fiscal backdrop, the Treasury Department announced an expansion of its government debt buyback operations.
The 10-year Treasury yield was trading around 4.68% Wednesday morning before the announcement. The Treasury subsequently unveiled plans to double buyback levels for longer-dated government securities, targeting the 10- to 30-year portion of the Treasury market.
Treasury Secretary Scott Bessent indicated that accelerated buybacks could ultimately be even larger than the announced amounts. He also defended the intervention, arguing that prevailing long-term yields did not reflect underlying market fundamentals.
The Treasury described the program as providing additional liquidity support to the government bond market.
Treasury Yields Rebound After Initial Decline
The bond market initially reacted to the Treasury announcement by sending yields lower, but the move did not last.
Longer-dated Treasury yields subsequently climbed again, and by Friday the 10-year Treasury yield had moved above the level seen before the buyback announcement.
The reversal kept attention focused on whether increased Treasury buybacks can meaningfully influence longer-term borrowing costs amid a growing federal debt load and continued demand for government financing.
Bessent dismissed the significance of the immediate market reaction, saying that movements occurring within a 24-hour period should be viewed as short-term noise. He expressed confidence that the market would respond as investors better understood the government's focus on fiscal consolidation and efforts to bring greater equilibrium to the Treasury market.
Bessent Says U.S. Can “Grow Our Way Out” of Debt
Bessent also addressed the significance of the $40 trillion national debt milestone and the administration's broader fiscal strategy.
The Treasury Secretary argued that the headline figure should be considered alongside the amount of publicly traded debt, noting that Social Security funds and other government entities hold a substantial portion of federal obligations.
Bessent said the government's strategy is to “grow our way out” of the debt burden by expanding the economy and increasing the tax base. He pointed to immediate expensing for factories, equipment and farm structures as measures he believes can encourage investment and eventually increase economic capacity.
He also argued that the $40 trillion figure itself should not be treated as a uniquely significant threshold and suggested there is a strong possibility that the federal deficit has already reached its peak under the current administration.
What the Debt and Bond Market Mean for Precious Metals
The week's developments put the relationship between government debt, Treasury yields and precious metals back in focus.
Gold and silver advanced during a week in which federal debt crossed $40 trillion and the Treasury expanded its intervention in the longer-dated government bond market. At the same time, the initial decline in yields following the buyback announcement quickly reversed, highlighting the volatility surrounding the Treasury market.
For precious-metals market participants, those developments provide an important macroeconomic backdrop as investors evaluate government borrowing, interest costs, bond yields and the longer-term direction of U.S. fiscal policy.
Sources:
Treasury bond buybacks ease long-term yields, but analysts see limited relief
https://www.cnbc.com/2026/08/20/treasury-bond-buybacks-long-term-yields.html
Bessent’s efforts in the Treasury market so far haven’t worked. Here’s what else he can try
https://www.cnbc.com/2026/08/20/bessents-efforts-in-the-treasury-market-so-far-havent-worked-heres-what-else-he-can-try.html
