Gold Holds Near Two-Month High as US Yields and Dollar Ease

Gold prices remained close to their highest level in more than two months on Thursday, supported by falling US Treasury yields and a weaker dollar following an unexpected liquidity support move by the US Treasury.

 

Spot gold was little changed at $4,512.19 per ounce by 0031 GMT, after touching $4,525.79, its highest level since June 2. The metal surged more than 4% on Wednesday.

 

US gold futures for December delivery climbed 0.6% to $4,569.80 per ounce.

 

Long-term US Treasury yields declined after the Treasury announced plans to double liquidity support through buyback operations for longer-dated government securities. A softer dollar also supported gold by making the greenback-priced metal cheaper for overseas buyers.

 

Meanwhile, concerns over US fiscal conditions intensified after total US government debt surpassed $40 trillion. Investors are also monitoring the Federal Reserve’s interest-rate outlook, with markets pricing in a 67.3% probability of rates remaining unchanged and a 32.7% chance of a rate hike in September.

 

Gold remains sensitive to interest-rate expectations because it does not generate interest income, while it typically benefits from economic and geopolitical uncertainty.

 

Among other precious metals, silver rose 0.2% to $67.06 per ounce, while platinum fell 0.4% to $1,816.78 and palladium gained 0.3% to $1,339.05.