U.S. Treasury Secretary Scott Bessant announced on Wednesday that the Treasury Department would double the size of its 10- to 30-year Treasury bond repurchase program. Following the announcement, gold prices surged 3%, climbing to $4,550 per ounce. For investors, this move by the U.S. Treasury sends a signal that it is time to allocate funds to gold. Numerous market analysts, including the Citigroup Global Macro Research team led by Dirk Wheeler, have expressed the above view. Following Bessant's remarks on Wednesday, Citigroup released a research report giving gold a 6-12 month base scenario target price of $5,000 and an optimistic scenario target price of $6,000, with a clear view: "Gold: Follow the trend." This type of analysis sends a signal: the so-called "currency devaluation trade" has returned to the market. The "currency devaluation trade" is a trading strategy that emerged in 2025: investors, worried about aggressive fiscal and monetary policies triggering currency devaluation, are withdrawing from fiat currency assets and turning to inflation hedges and traditional value reserves like precious metals. Why is gold expected to continue appreciating? As Wheeler emphasized, "The main price to pay for trying to suppress yields is a weaker dollar." This is because the market cannot obtain reasonable returns from buying long-term US Treasury bonds; the interest rate differential advantage that previously attracted funds to high-yield dollar assets has now been significantly weakened. Furthermore, the dollar and gold prices are usually negatively correlated; the sharp decline in the dollar index on Wednesday further boosted gold prices. Wheeler added that historically, a steeper yield curve (i.e., a widening gap between the 2-year and 30-year US Treasury yields) tends to benefit gold prices. Meanwhile, Wednesday's surge in gold prices coincided with the total US Treasury debt surpassing the $40 trillion mark, a timing likely not accidental. Robin Brooks, a senior fellow at the Brookings Institution, stated on Wednesday that the core issue is "the US's unwillingness to control the size of its fiscal deficit." Global markets are increasingly concerned about the sustainability of the US deficit model, and gold has become a beneficiary of this concern. Keith Lennar, chief investment officer at Truss Consulting, who was bearish on gold for most of 2026, upgraded his gold investment rating to neutral after Wednesday's policy announcement, taking into account multiple factors. (The stabilization of real interest rates has removed one obstacle to gold's lack of returns.) First, real interest rates (nominal yields on bonds adjusted for inflation) have stabilized. Gold itself does not generate interest, and rising real interest rates have historically been a major drag on gold prices. (Spot gold daily chart source: EasyTrade) Second, gold prices broke through the 200-day moving average of $4,510 on Wednesday; Third, central bank gold demand remains resilient; Finally, Lennar believes that the weakening dollar also supports gold prices.