Investors have long wondered whether Treasury Secretary Scott Bessent would stand with a safety net to catch falling bonds in times of true distress.

They don’t have to wonder any longer.

As bond prices dropped, Bessent on Wednesday said that starting on Sept. 9 the Treasury will buy back at least $2 billion more in long-term debt in each operation than previously communicated, through Nov. 4. Markets weren’t expecting a buyback announcement—and the impact was felt around Wall Street.

On Friday, one of the ripples of the Bessent move was becoming clear, with the prices of gold and other metals rising. Gold closed the week strong, notching a 2.4% increase on Friday and a total gain of 5.9% since the Treasury’s buyback announcement.

Silver and platinum also rallied on Friday, bringing their total gains over the last three sessions to 8.6% and 9.3%, respectively.

How did we get here?

The jump in metals came after the Bessent move, but the amount wasn’t the catalyst.

Taking out an additional $2 billion is nothing when investors buy up over $230 billion in 10, 20- and 30- year bonds every quarter. But the timing was a surprise, given the Treasury had just given its routine quarterly update on buybacks on Aug. 5.

The move on buybacks came after Bessent on Aug. 5 unexpectedly opened the door to potentially reducing the amount of long-term bond issuance. Late last month, Bessent oversaw the coordinated effort by U.S. and Japan to strengthen the yen, an action that was seen as a way to ensure Japan didn’t have to sell any of its $1.1 trillion in U.S. debt holdings to do its own yen buying.

Last year, Bessent stepped up to help another ally, Argentina.

For a $32 trillion Treasury market accustomed to absolute predictability, the latest buyback surprise after a series of other shifts made one thing clear: Bessent is willing to intervene to support a struggling bond market. Investors, spooked by $40 trillion debt headlines and the glaring absence of Trump-backed interest rate cuts from the Federal Reserve, had been dumping bonds before Bessent’s involvement.

As prices fell, 30-year yields were trading at heights untouched since 2007 on Tuesday.

With the unconventional intervention Bessent practically told investors worried about falling prices that “‘Don’t worry, we have your back. Go ahead and get involved,’” wrote Head of US Rates Strategy at RBC Capital Blake Gwinn.

“The “Bessent Put” just went from theoretical to actual,” he wrote, referring to the name given to Bessent’s interventionist moves.

But the moves also signal an unwillingness to do what’s really needed: Reign in the debt.

“Markets take a dim view of this and so it’s no surprise that precious metals are up sharply since the buyback announcement,” Robin J. Brooks, a senior fellow at the Brookings Institution, wrote on Substack.

The logic is simple: If heavily indebted countries like the U.S. don’t show a clear commitment for fiscal discipline—and instead financially repress yields to keep borrowing cheaply from investors—then confidence in the country’s asset and currency erodes.

A weaker currency can also become a deliberate path out of debt since it effectively shrinks the value of debt. And as the dollar losses value, gold, a primary competitor to fiat currencies, becomes more appealing.

Since the announcement, a popular gold exchange-traded fund, VanEck Gold Miners, had its best three-day stretch in 16 months. Its now tracking for a 20% gain for the year; it was down year to date just as recently as the start of this month.

This is the result of the so-called debasement trade, and the dollar is paying the price for it. It was down 0.8% this week.

“When it comes to the dollar, even the hint of financial repression and more unconventional policy is unhelpful,” wrote Jonas Goltermann, the Chief Markets Economist at Capital Economics.

Another argument for gold is that if Bessent is going to artificially create demand for the 10-year bond, by buying it back or issuing less of it, then yields will remain suppressed. And if inflation stays elevated—as it has for the past five years—then it threatens to push the rate Treasuries pay below the rate of inflation. If a government bond can’t guarantee higher real yield, then that makes gold more attractive.

A third asset, Bitcoin, has also gotten supercharged since the buyback announcement, up 19.18% over the last three sessions, its best three day gain since March 2023.

But that’s more coincidental because regulatory news is a bigger driver. Trump on Wednesday, the same day as the Treasury buyback announcement, met with crypto executives at the White House and called for Congress to vote through the industry-friendly Clarity Act, which would regulate Bitcoin and other tokens as commodities.

The best solution to make people get out of gold—an asset that generates no real economic gain—and raise U.S. Treasury values and in turn boost the dollar would be to reduce the debt.

“But that is not within the gift of the Treasury Secretary, or even the President: gridlock in Congress makes substantial changes to US fiscal policy a mammoth task,” Goltermann wrote.

Some good news could arrive on Monday at 2 p.m. Eastern, when Bessent is holding a press conference.

In an interview with CNBC on Thursday, Bessent indicated an announcement on a new deficit reduction push could be coming next week.

The administration “will be examining, both on the revenue side and the cost side, what we can do,” he said.