Background of the Gold Prices Surge: To Avoid Confusing US Treasuries, the Dollar, and the FOMC with Entry Decisions
Conclusion
The surge in gold on August 19 was mainly due to the U.S. Treasury’s expanded repurchase of long-term government bonds, which led to a drop in U.S. long-term yields and the dollar.
However, this material alone cannot justify the conclusion that “gold will rise further.”
Fundamentals indicate the direction where volatility is likely, but actual entries should be confirmed by chart structure.
What happened with the U.S. Treasury announcement
On August 19, the U.S. Treasury announced an increase in the size of repurchases of 10- to 30-year bonds to at least $4 billion per operation. The target period is from September 9 to November 4.
Following this announcement, long-term yields and the dollar fell, and spot gold briefly rose into the mid-$4,499 range. Intraday it rose about 3.6%, reaching a high not seen since early June.
Gold is an asset that does not generate interest. Therefore, a decline in long-term yields or a weaker dollar tends to reduce the relative disadvantage of holding gold. The rise this time is more naturally seen as a spillover from changes in the bond and dollar markets rather than a sudden new positive material for gold itself.
However, FOMC minutes are not one-sided material
The July FOMC minutes released on the same day showed heightened inflation concerns. Several participants were prepared to support rate hikes, and many expected that additional tightening could be necessary if inflation did not decline.
This is where the difficulty lies.
A decline in long-term yields and a weaker dollar tend to be favorable for gold
Market expectations of future rate hikes tend to be a headwind for gold
Geopolitical risks and rising oil prices further complicate both views
In short, this is not a situation where one can simply say “there is good news for gold.”
In reality, gold on the 20th fell after the previous day’s surge due to profit-taking. This does not mean the positive material was negated; it means that the initial reaction to the news and whether that price level is accepted by the market are separate issues.
Separate the direction of material from the basis for entries
After a major event, the most avoidable mistake is chasing a surge without analysis.
After confirming the material, you should examine in the following order:
In the higher timeframe, is the structure of highs and lows being maintained
After the surge, in which direction is the nearest liquidity likely to move
In the lower timeframe, is there a clear displacement
Is MSS (Market Structure Shift) confirmed
Even with a structural stop, is there still enough risk-reward
Even if the news provides an upward basis, if the price action on the chart does not accept buying, it does not constitute a basis for entry. Conversely, if the structure collapses on a pullback after a surge, continuing to buy solely on the initial rise material becomes risky.
In a prop firm account, saying “stand by” can also be an execution decision
In a funded evaluation account, large price swings after an event are a source of opportunity, but they can also accelerate toward daily loss limits.
Immediately after major indicators or policy announcements, the price moves can be large, so increasing lot sizes is not the right move. Decide your allowable loss in advance, and if the structure does not appear, abstain. This is not a missed opportunity but a decision to preserve the account for the next valid opportunity.
Summary
This gold surge can be understood as a chain reaction from the Treasury’s bond market actions, falling long-term yields, and a weaker dollar.
However, subsequent price movements are also influenced by FOMC inflation vigilance and geopolitical risks. Fundamentals indicate “where price ranges are likely to expand,” while SM C and Dow structure help confirm “which side is actually favored.”
To avoid mixing material with entries, and to select only when structure, stop placement, and risk-reward align, is especially important in highly volatile phases.
This article is intended for information purposes and does not recommend specific buying or selling.