Gold held near a two-month high on Thursday after a surprise US Treasury liquidity support announcement drove Treasury yields and the dollar lower.
Spot gold was little changed at US$4,512.19 an ounce as of 0031 GMT, having touched $4,525.79 — its highest level since June 2. Prices jumped more than 4% on Wednesday. US gold futures for December delivery rose 0.6% to $4,569.80.
What moved the market
Longer-dated US Treasury yields fell after the Treasury Department said it would double the size of its liquidity-support buyback operations for longer-dated notes and bonds. The US dollar also remained subdued, making gold cheaper for buyers holding other currencies.
Markets are separately weighing concerns over the US fiscal position after the Treasury said total US debt had passed $40 trillion for the first time.
Minutes from the Federal Reserve’s latest meeting showed several policymakers were prepared to raise interest rates, while many said rates could need to increase if inflation fails to fall towards the Fed’s 2% target. According to the CME FedWatch Tool, traders are pricing a 67.3% chance of no rate change in September against a 32.7% probability of an increase.
Gold is generally treated as a safe-haven asset during economic and geopolitical uncertainty, while higher interest rates reduce its appeal because the metal pays no interest.
Other precious metals
Spot silver rose 0.2% to $67.06 an ounce. Platinum fell 0.4% to $1,816.78, and palladium gained 0.3% to $1,339.05.
The rally extends the move recorded when gold and oil prices reacted to US inflation data earlier this month.
The figures above are an Asian-session snapshot taken at 0031 GMT on Thursday and will differ from Wednesday’s US closing levels. Ada Derana carried the report without a wire credit; no other Sri Lankan newsroom monitored for this story had filed its own version at the time of writing.
