NEW YORK / RankWire.AI / – Gold traded close to a seven-week high on Thursday, posting its most substantial daily increase since February, with spot gold climbing 0.5% to reach $4,265.22 an ounce by 0330 GMT, after gaining 4.4% during the previous session. December U.S. gold futures also rose 0.5% to $4,324.60 following a 4% jump on Wednesday, supported by declining Treasury yields and a weakening dollar that bolstered the broader precious metals sector.
This Thursday’s upward move kept gold prices above the 50-day moving average of approximately $4,160, a level it had recently traded below during its retreat. Prices climbed back to levels last seen on June 18 and were more than 5% higher than Monday’s close, although still below the peaks reached in May when spot prices exceeded $4,500 an ounce. The recent rally managed to recover a significant portion of the losses experienced in June and July.
U.S. Treasury yields decreased as gold prices strengthened, with the benchmark 10-year yield holding 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 pays no interest, a decline in bond yields reduces the income differential between bullion and government debt. Concurrently, the dollar weakened against several major currencies, making gold relatively cheaper for buyers using currencies other than the dollar.
Shifts in bond markets fuel gold’s rally
Adding to the economic context influencing market movements, recent employment data showed private employers added 44,000 jobs in July, compared to a revised increase of 95,000 in June, marking the smallest monthly gain in half a year. The Federal Reserve maintained its benchmark interest rate between 3.5% and 3.75% on July 29, with the broader government employment report scheduled for release on Friday, covering hiring across public and private sectors.
Before Wednesday’s sharp rebound, gold faced consistent downward pressure, with spot prices near $4,008 on July 20 and around $4,052 on August 3. The 4.4% surge on Wednesday represented the most substantial single-day gain in nearly six months. Thursday’s increase kept gold close to the top of its recent trading range, with both spot and futures prices remaining significantly above their levels at the start of the week, amid ongoing focus on yields and currency movements.
Official institutions remain key purchasers of gold
Demand from official and institutional sources continued to influence the overall gold market, with the World Gold Council reporting a demand of 1,269 metric tons in the second quarter, including over-the-counter transactions, matching the demand seen during the same period last year. First-half demand increased by 2% to 2,522 tons, with Poland, Uzbekistan, China, and Kazakhstan among the largest central-bank buyers reported in that period. Higher average prices during these months also contributed to an increase in the total value of gold demand.
Other precious metals experienced varied movements during Thursday’s trading, with silver falling slightly by 0.1% to $62.02 an ounce, while platinum gained 1.2% to $1,755.18. Palladium increased by 0.8% to $1,374.33, marking its third consecutive rise. Gold remained the most prominent focus after the rally on Wednesday, holding near a seven-week peak as Treasury yields declined and the dollar softened, extending the rebound that pushed bullion above key recent trading levels.