US Treasury Secretary Scott Bessent drives shift toward gold and Bitcoin

US Treasury Secretary Scott Bessent has initiated moves that are driving investors toward hard assets. The Treasury announced it would double its maximum volume for Treasury bond buybacks from $2 billion to at least $4 billion. While the absolute amount is small relative to the total market, analysts suggest the signal is significant as the US federal debt exceeds $40 trillion and the monthly budget deficit reached a five-year high in July.

This shift has fueled a rise in gold and Bitcoin. Gold has reached three-month highs near $4,700 per ounce, while Bitcoin saw a 22 percent increase last week, briefly climbing above $81,000. Simultaneously, the US dollar index has approached three-month lows.

Bessent is also navigating geopolitical tensions and debt market volatility. His administration is proposing stricter sanctions against Iran's oil customers, a move that could increase friction with China. Critics warn that such pressure, combined with efforts to stabilize debt markets, could trigger retaliation from Beijing regarding rare earth elements and impact the supply of memory chips. Meanwhile, 15-year Treasury yields have risen to nearly 5.34 percent, the highest level in approximately 20 years.