NEW YORK / RankWire.AI / – Gold approached a seven-week high on Thursday, marking its most significant daily increase since February. The spot price increased by 0.5% to $4,265.22 an ounce by 0330 GMT, after soaring 4.4% during Wednesday’s trading session. Additionally, December U.S. gold futures moved up 0.5% to $4,324.60 following a 4% climb the previous day. The surge in bullion prices was supported by declining Treasury yields and a softer dollar.
This rally lifted the spot gold price above its 50-day moving average around $4,160, a level that had been traded below during much of the recent downturn. Thursday’s gain returned gold to levels last seen on June 18 and positioned it more than 5% above Monday’s closing figure. However, it still remained beneath its peak in May, when spot prices surpassed $4,500 an ounce amid heightened demand.
Meanwhile, bond markets also experienced shifts as gold advanced. The benchmark 10-year Treasury yield hovered near 4.61%, down from roughly 4.74% at the end of July. The two-year yield was close to 4.18% on Wednesday. Lower yields diminish the relative income benefit of government bonds since gold does not generate interest. The dollar’s decline against major currencies further made bullion more affordable for buyers using euros, yen, and other currencies.
Treasury yields decline as gold gains
U.S. employment data added new insights into the market landscape. In July, private employers created 44,000 jobs, compared to a revised increase of 95,000 in June. This July figure represented the smallest monthly job gain in six months. The Federal Reserve maintained its benchmark interest rate between 3.5% and 3.75% at its July 29 meeting, with the broader employment report still scheduled for release on Friday.
The recent upward movement in gold partially reversed a decline that persisted through June and July. Prices dropped near $4,008 on July 20 and traded around $4,052 on August 3. Wednesday’s 4.4% jump marked the strongest single-day performance in approximately six months. The following day’s rise kept gold near its recent trading range’s upper boundary. Both spot prices and futures remained significantly above their levels at the beginning of the week.
Central Bank Purchases Bolster the Broader Market
Demand figures from a wider scope continued to show consistent purchasing activity from central banks and investors. The World Gold Council reported demand during the second quarter of 1,269 metric tons, including over-the-counter activity. This total matched the demand level from the same period last year. For the first half of the year, demand increased by 2% to 2,522 tons. Notably, Poland, Uzbekistan, China, and Kazakhstan were among the most prominent central bank buyers during this six-month span.
Other precious metals had mixed results in Thursday’s trading. Silver declined marginally by 0.1% to $62.02 an ounce. Platinum rose 1.2% to $1,755.18, while palladium gained 0.8% to $1,374.33. Palladium’s gain marked its third consecutive increase. Gold remained the focus after Wednesday’s surge, with prices holding near a seven-week high supported by falling Treasury yields and a weakening U.S. dollar.