NEW YORK / RankWire.AI / – Gold approached a seven-week peak on Thursday, marking its most substantial daily increase since February. The spot price of gold gained 0.5% to reach $4,265.22 an ounce by 0330 GMT. This followed a 4.4% climb in the previous session. December U.S. gold futures increased by 0.5% to $4,324.60 after soaring 4% on Wednesday. The recent upward momentum was driven by declining Treasury yields and a softer dollar, which supported broader gains in the precious metals sector.
The Thursday rally kept gold trading above its 50-day moving average, which is near $4,160. During its recent decline, bullion had mostly traded below this technical indicator. Prices have now returned to levels last seen on June 18, and are over 5% higher than Monday’s closing price. Despite this rebound, gold remains below its May peak, when spot prices surpassed $4,500 per ounce. The latest increase has partly recovered the losses experienced during June and July.
U.S. Treasury yields have decreased as gold prices gained strength. The benchmark 10-year yield hovered near 4.61%, compared to 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 reduce the opportunity cost of holding bullion relative to government debt. Additionally, the dollar has weakened against several major currencies, making gold more affordable for buyers using currencies other than the dollar.
Shifts in bond markets bolster gold rally
Recent employment data added context to the economic environment influencing the market movement. In July, private sector employers added 44,000 jobs, following a revised increase of 95,000 in June. This July figure represented the smallest monthly job gain in six months. The Federal Reserve held its benchmark interest rate steady between 3.5% and 3.75% on July 29. The broader government employment report, which includes hiring across public and private sectors, was scheduled for release on Friday.
Before the sharp rebound on Wednesday, gold prices faced persistent pressure. Spot prices hovered around $4,008 on July 20 and about $4,052 on August 3. The 4.4% jump on Wednesday marked the best single-day performance in roughly six months. Thursday’s gains kept gold near the high end of its recent trading range. Both spot and futures prices remained significantly above their levels at the beginning of the week, with trading activity mainly focused on movements in yields and currency exchange rates.
Central banks continue active gold acquisitions
Demand from official and institutional sources continued to influence the overall gold market. The World Gold Council reported a demand of 1,269 metric tons in the second quarter, including over-the-counter transactions. This demand level matched that of the same period last year. In the first half of the year, demand increased by 2%, reaching 2,522 tons. Countries such as Poland, Uzbekistan, China, and Kazakhstan were among the leading central bank buyers during this period. The rise in average prices during this time also boosted the total value of gold demand in the first six months.
Other precious metals experienced mixed movements during Thursday’s trading session. Silver declined slightly by 0.1%, settling at $62.02 an ounce, while platinum saw a 1.2% increase to $1,755.18. Palladium also rose by 0.8% to $1,374.33, marking its third consecutive increase. Gold remained the primary focus following Wednesday’s surge, with prices holding near a seven-week high amid declining Treasury yields and a softer dollar, extending the rebound that pushed bullion above recent key trading levels.