The iShares Barclays 20+ Year Treasury Bond Fund (NYSEArca: TLT) is on track for a gain of 4% this week as the U.S. government debt ETF surges close to its all-time high.
Treasury yields fell sharply this week and bond prices rose as the European debt crisis returned again to rattle global markets. Yields on the 10-year Treasury notes are near record lows.
“Escalating concerns over Europe in addition to a struggling global economy have encouraged investors, institutions and governments alike to move a portion of their investment dollars to the relative safety of the US. This has resulted in a significant decline of the 10-year Treasury bond yield,” according to chartoftheday.com.
“This decline has brought the 10-year Treasury bond yield to a 112-year low. The decline of the 10-year Treasury bond yield has been significant enough to bring the 10-year yield near resistance of what is a 26-year downtrend channel,” it added.
The rally in Treasury ETFs reflects concerns that Greece will leave the euro, and also suggests investors are worried about deflation.