NEW YORK / RankWire.AI / – Gold approached a seven-week peak on Thursday, marking its most significant daily increase since February. Spot gold gained 0.5% to reach $4,265.22 an ounce by 0330 GMT, following a 4.4% rise in the previous trading session. December U.S. gold futures also increased by 0.5%, closing at $4,324.60 after a 4% gain on Wednesday. The decline in Treasury yields combined with a softer dollar supported broader gains across precious metals markets.
On Thursday, gold prices stayed above its 50-day moving average of approximately $4,160. This technical level had been a hurdle during much of its recent downturn. Prices climbed back to levels last seen on June 18, ending more than 5% above Monday’s close. Nonetheless, gold remains below the highs seen in May when spot prices exceeded $4,500 an ounce. The recent rally has recovered a substantial part of the losses accumulated during June and July.
U.S. Treasury yields decreased as gold prices gained strength. The benchmark 10-year yield hovered near 4.61%, down from about 4.74% at the end of July. The two-year yield was close to 4.18% on Wednesday. Because gold does not pay interest, lower bond yields reduce the income advantage of holding government debt compared to bullion. Concurrently, the dollar weakened against several major currencies, making gold cheaper for buyers using currencies other than the dollar.
Gold rally driven by shifts in bond markets
Recent employment data added context to the economic environment influencing the market. Private sector employers created 44,000 jobs in July, following a revised increase of 95,000 in June. The July figure represented 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. The broader employment report from the government is still scheduled for Friday, covering hiring activity across both public and private sectors.
Prior to Wednesday’s notable rebound, gold prices faced consistent downward pressure, trading near $4,008 on July 20 and around $4,052 on August 3. The 4.4% increase on Wednesday marked the metal’s strongest single-day performance in approximately six months. Thursday’s gains kept gold near the higher end of its recent trading range, with both spot and futures prices remaining well above their levels at the start of the week, as trading activity centered on yields and currencies.
Official sector gold purchases remain significant
Demand from official and institutional sources continued to influence the overall gold market. The World Gold Council reported second-quarter demand totaling 1,269 metric tons, including over-the-counter transactions. This level matched demand from the same period last year. First-half demand increased by 2%, reaching 2,522 tons. Countries like Poland, Uzbekistan, China, and Kazakhstan were among the top reported central-bank buyers during this period. Additionally, higher average prices during the first half of the year increased the total value of gold demand.
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 climbed 1.2% to $1,755.18. Palladium gained 0.8% to $1,374.33, marking its third consecutive increase. Despite these fluctuations, gold remained the primary focus following Wednesday’s surge. Prices held near a seven-week high as Treasury yields declined and the dollar softened, extending a rebound that pushed bullion above key recent trading levels.