NEW YORK / RankWire.AI / – Gold hovered near a seven-week peak on Thursday, posting its most substantial daily increase since February. Spot gold rose 0.5% to reach $4,265.22 an ounce by 0330 GMT, having gained 4.4% during the previous session. December U.S. gold futures increased 0.5% to $4,324.60 after climbing 4% on Wednesday. The decline in Treasury yields coupled with a weaker dollar supported broader gains across precious metals markets.
The rally on Thursday kept gold above its 50-day moving average around $4,160. For much of its recent decline, bullion had traded below that technical level. Prices rebounded to levels last seen on June 18 and were more than 5% higher than Monday’s close. Although gold remains below the peaks of May when spot prices exceeded $4,500 an ounce, this latest surge recouped a significant portion of the losses from June and July.
U.S. Treasury yields declined as gold prices gained momentum. The benchmark 10-year yield hovered near 4.61%, down from approximately 4.74% at the end of July. Meanwhile, the two-year yield was around 4.18% on Wednesday. Since gold does not pay interest, falling bond yields diminish the income differential between bullion and government debt. Concurrently, the dollar weakened against several major currencies, making gold less expensive for buyers holding other currencies.
Bond market movements support gold rally
Recent employment data contributed to the economic backdrop influencing the market. In July, private employers added 44,000 jobs, following a revised increase of 95,000 in June. The July figure represented the smallest monthly gain in six months. The Federal Reserve maintained its benchmark interest rate between 3.5% and 3.75% on July 29. The government’s comprehensive employment report, which covers hiring across public and private sectors, remains scheduled for release on Friday.
Gold faced persistent downward pressure prior to Wednesday’s sharp rebound. Spot prices hovered near $4,008 on July 20 and around $4,052 on August 3. The 4.4% increase on Wednesday marked the best single-day performance for the metal in about six months. Thursday’s rise kept bullion near the upper boundary of its recent trading range. Both spot and futures prices stayed well above their early-week levels, with market activity mainly focused on yield movements and currency fluctuations.
Central banks remain key buyers of gold
Official and institutional demand continued to influence the overall gold market. The World Gold Council reported demand of 1,269 metric tons for the second quarter, including over-the-counter transactions. This figure matched the demand registered during the same period last year. In the first half, overall demand increased by 2% to 2,522 tons. Poland, Uzbekistan, China, and Kazakhstan were among the leading central-bank purchasers during this timeframe. Elevated average prices also boosted the total value of gold demand in the first six months.
Meanwhile, other precious metals exhibited mixed movements on Thursday. Silver dipped 0.1% to $62.02 an ounce, while platinum gained 1.2% to $1,755.18. Palladium increased 0.8% to $1,374.33, marking its third consecutive gain. Despite these fluctuations, gold remained the primary focus after Wednesday’s surge. Prices stayed near a seven-week high as Treasury yields declined and the dollar softened, extending a rebound that lifted gold above key recent trading levels.