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Gold mining equities extended their August rally on Thursday, advancing even as spot gold edged lower and long-dated Treasury yields rebounded, underscoring investor appetite for precious-metals producers amid mounting fiscal concerns.
The VanEck Gold Miners ETF (NYSE Arca: GDX) rose 2.3% by 12:40 p.m. ET. Agnico Eagle Mines (TSX, NYSE: AEM) gained 2%, Newmont (NYSE: NEM; TSX: NGT) added 2.2%, and Barrick Mining (NYSE: B; TSX: ABX) advanced 2.1%. Spot gold traded near $4,509, down marginally.
The gains came as the 30-year Treasury yield climbed as high as 5.27% before easing to about 5.25%, erasing much of the decline that followed the Treasury’s announcement Wednesday that it would at least double buybacks of longer-dated bonds. The rebound suggests investors remain unconvinced that the latest intervention can contain long-term borrowing costs.
U.S. public debt has surpassed $40 trillion. Persistent fiscal pressure and elevated yields strengthen gold’s appeal as a hedge, while miners offer leveraged exposure to high bullion prices. Charlie Morris, chief investment officer at ByteTree, said the U.S. government is effectively engaged in multiple major quantitative easing operations, pushing gold higher with room for more gains ahead. He noted that the annual growth rate of U.S. public debt has accelerated from 3.7% in the 1990s to 7.8% until the pandemic and 8.6% since. “The gold supply can only rise at around 2% [per year] and so the gold price has had to do the rest,” Morris said.
Treasury Secretary Scott Bessent moved quickly to address the market reaction, telling CNBC that buybacks “could be more than the $4 billion” planned for next month and that the administration would unveil a fiscal consolidation plan by the end of this week or early next week. He dismissed the latest 24-hour moves in yields as “noise” and said there is a “very good chance” the fiscal deficit has peaked.
Bond strategists remained skeptical that larger buybacks would alter the underlying trajectory. George Catrambone, head of fixed income at DWS Americas, called the intervention “the equivalent of tossing paper towel into a tsunami.” Molly Brooks, U.S. rates strategist at TD Securities, said the yield increase “is actually driven by oil” and described the buyback shift as “more of a Band-Aid for Treasury’s long-end.”
For gold miners, that uncertainty may be precisely the attraction. With U.S. debt above $40 trillion and the deficit approaching $2 trillion, failure to restrain long-term yields could reinforce demand for gold as a hedge. Mining equities can magnify moves in bullion because higher gold prices expand producers’ margins and cash flow faster than the underlying metal rises. That operating leverage helps explain why miners can advance even when spot gold pauses or retreats.
Thursday’s divergence — miners rising while spot gold slipped and long-term yields rebounded — suggests investors are looking beyond daily moves in bullion and bonds toward the broader fiscal backdrop. The risk is that persistently higher yields eventually strengthen competing returns from government debt or tighten financial conditions enough to pressure gold and equities. For now, miners are signaling that investors remain willing to bet Washington’s struggle with debt and borrowing costs will continue to support the gold trade.
