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Why US Treasury Buybacks Matter for Gold Miners
21 September 2026
The US Treasury buyback announcement coincided with a rise in the gold price, while gold-mining equities recorded a larger move. Past performance is not a reliable indicator of future results.
When the US Federal Reserve raised policy rates for the first time in three years at its 16 September meeting, the price of gold remained broadly stable. Granted, the quarter point hike was widely expected. But what mattered far more for gold was the announcement a few weeks earlier that the US Treasury would expand its purchases of longer-dated government securities.
On the day the buybacks were announced, 19 August, the gold price rose 4.2%. Gold mining shares magnified the move, with VanEck Gold Miners ETF (GDX) rising 9.4% and VanEck Junior Gold Miners ETF (GDXJ) 9.6%. Past performance is not a reliable indicator of future results. The performance figures shown relate to a single day and should not be considered representative of longer-term performance.
Gold is, theoretically, sensitive to both sides of the fiscal and monetary policy drama underway in the United States. The bond buybacks heightened concerns about the US fiscal deficit, government debt, inflation and the dollar — all historically worries that tend to bolster demand for assets perceived as stores of value.
Conversely, higher interest rates and a stronger US dollar could weigh on gold because the metal does not generate income. On the day of the September rate hike, however, the gold price was relatively stable, closing down by a percent at USD 4,271 per troy ounce1.
Gold vs Gold Miners (Indexed to 100) After Treasury Announcement
Note: past performance is not a reliable indicator of future results. Gold-mining equities have historically been expected to show higher sensitivity to the gold price than the metal itself, as production costs adjust more slowly and margins can move disproportionately — in both directions. Indexing both to 100 shows that effect over the period. Mining shares are not equivalent to physical gold and carry company-specific, operational, currency and political risks. “Gold” is the gold spot price in USD per troy ounce (source: gold bullion). “Gold miners” is represented by the MarketVector™ Global Gold Miners Index. It is not possible to invest directly in an index.
Source: VanEck, Gold Bullion and Morningstar data retrieved on 17th September 2026, timeframe 18/08/2026–16/09/2026
The Treasury’s Buyback Program
The US Treasury’s August announcement that it would increase the maximum size of its liquidity-support buybacks from the previous limit of USD 2 billion per operation to at least USD 4 billion, effective from 9 September, highlighted the country’s deteriorating fiscal position2. In the event, the maximum purchase amount was set at USD 6 billion for the first expanded operation in the 10-to-20-year Treasury sector scheduled for 10 September.
While the Treasury’s stated objective was to provide greater liquidity support in longer-dated nominal securities, the broader market and fiscal context is nevertheless important. Long-term Treasury yields have been under pressure from several overlapping factors, including:
- substantial federal borrowing requirements;
- uncertainty surrounding the future path of the budget deficit;
- a growing supply of Treasury securities;
- persistent inflation;
- elevated energy prices; and
- uncertainty over Federal Reserve policy.
The fiscal outlook became still less certain after President Trump proposed a USD 5,000 payment for every adult US citizen if Republicans3 retain control of both chambers of Congress in the midterm elections. Buybacks can address specific liquidity conditions, but they do not directly resolve underlying fiscal or macroeconomic pressures.
Implications For Gold And Gold-Mining Equities
For now, it’s clear that markets are paying more attention to the Treasury’s bond buybacks than the direction of US policy rates. Beyond that, though, gold-mining equities’ performance also depends on company-specific and operational variables. They are leveraged, operationally complex businesses where rising gold prices can affect miners’ revenues and margins disproportionately when production costs adjust more slowly. This operating leverage might work in both directions.
Mining companies are also exposed to labor, fuel, equipment and financing costs, as well as currency movements, reserve quality, execution risk and political or regulatory developments. Gold-mining shares should therefore not be treated as equivalent to physical gold, even when both respond to the same macroeconomic developments.
By most valuation metrics — price to cash flow, price to earnings, relative to their own history, relative to gold, relative to the broader equity market — gold mining shares remain deeply discounted at a moment when the underlying businesses are generating some of the strongest cashflows in their history. Yet anomalies such as this can persist for a long time. Past performance is not indicative of future results, and valuations may remain at current levels for an extended period.
Calendar-Year Average P/E vs. 10-Year Average
Source: Morningstar data – YTD as of 15th September 2026
What The Market Will Be Watching
In the meantime, the price of gold mining shares is likely to be affected by what happens to gold. Attention will remain focused on the buyback program which remains at an early stage, the government’s financing requirements and whether the proposed USD 5,000 payment develops into a formal legislative plan. Inflation data and Fed communications will also be of interest.
For gold and gold-mining equities, it’s a mixed environment. In the long-term, company level operating profits may influence performance. For the immediate future, eyes are on US fiscal and monetary developments.
1 BullionVault. (2026). Gold price chart. Retrieved September 17, 2026, from bullionvault.com
2 CNBC. (2026, September 9). Treasury Department to buy back $6 billion in longer-term debt, triple the normal level. cnbc.com
3 Kola, P. (2026, September 10). Trump says every adult American will get $5,000 if Republicans win midterms. bbc.com
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The value of the ETF may fluctuate significantly as a result of the investment strategy. The ETF´s holdings are disclosed on each dealing day on www.vaneck.com under the ETF´s Holdings section and as per PCF under the Documents section and published via one or more market data suppliers. The indicative net asset value (iNAV) of the ETF is available on Bloomberg. For details on the regulated markets where the ETF is listed, please refer to the Trading Information section on the ETF page at www.vaneck.com. Investors must buy and sell units of the UCITS on the secondary market via an intermediary (e.g. a broker) and cannot usually be sold directly back to the UCITS. Brokerage fees may incur. The buying price may exceed, or the selling price may be lower than the current net asset value. Investing in the ETF should be interpreted as acquiring shares of the ETF and not the underlying assets. Tax treatment depends on the personal circumstances of each investor and may vary over time. The ManCo may terminate the marketing of the ETF in one or more jurisdictions. The summary of the investor rights is available in English at: summary-of-investor-rights.pdf.
Please refer to the Prospectus — in English language — and the Key Information Document (“KID”) — in local language — before making any final investment decisions and for full information on risks. These documents can be obtained free of charge at www.vaneck.com, from the ManCo or from the appointed facility agent.
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The value of the ETF may fluctuate significantly as a result of the investment strategy. The ETF´s holdings are disclosed on each dealing day on www.vaneck.com under the ETF´s Holdings section and as per PCF under the Documents section and published via one or more market data suppliers. The indicative net asset value (iNAV) of the ETF is available on Bloomberg. For details on the regulated markets where the ETF is listed, please refer to the Trading Information section on the ETF page at www.vaneck.com. Investors must buy and sell units of the UCITS on the secondary market via an intermediary (e.g. a broker) and cannot usually be sold directly back to the UCITS. Brokerage fees may incur. The buying price may exceed, or the selling price may be lower than the current net asset value. Investing in the ETF should be interpreted as acquiring shares of the ETF and not the underlying assets. Tax treatment depends on the personal circumstances of each investor and may vary over time. The ManCo may terminate the marketing of the ETF in one or more jurisdictions. The summary of the investor rights is available in English at: summary-of-investor-rights.pdf.
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