Last week was a big one for gold. As investors grew increasingly uneasy about government debt, doubts over the stability of global bond markets pushed gold prices up nearly 5%.

📉 What Went Wrong in the Bond Market?
Two disappointing government bond auctions triggered anxiety in the financial world:

In Japan, a 30-year bond auction had its worst results in decades, with yields shooting above 3.2%.

Later that day, a U.S. 20-year bond auction also underperformed, pulling the 30-year bond yield down to 5%.

Under normal circumstances, rising bond yields suggest economic strength and investor confidence. But last week was different. Yields went up not because of growth, but because investors are increasingly afraid that governments may never be able to repay their mounting debt.

🪙 Why Did Gold Become So Attractive?
In uncertain times, investors seek safety — and gold delivers just that. It doesn’t generate interest, but it offers something more valuable: stability. Gold is globally accepted, free of credit or geopolitical risk, and not tied to any one government. That’s why institutions like the World Gold Council (WGC) are advocating for it to be classified as a High-Quality Liquid Asset (HQLA).

😬 But Not Everyone Is Reassured…
The European Central Bank (ECB) released a report last week warning that a wave of new investment in gold could destabilize the market. Their concern? Gold markets are often dominated by a few large players, highly leveraged, and opaque due to the use of over-the-counter derivatives.

✅ WGC Pushes Back: Gold Is Still Solid
The World Gold Council responded by saying the gold market remains liquid and resilient. Key points:

Gold sees around $165 billion in daily trading volume — second only to S&P 500 futures.

Even during the past six months of market turbulence, gold trading has been smooth and stable.

The WGC emphasized that gold continues to be a reliable strategic asset, especially now. As fiscal uncertainty grows, gold’s role as a hedge against systemic risk is more critical than ever.

📌 Bottom Line:
As trust in government debt weakens, gold is regaining attention. When people worry that debts won’t be repaid, they turn to something that never defaulted — gold.