NEW YORK / RankWire.AI / – Gold approached a seven-week peak on Thursday, marking its most significant daily rise since February. Spot gold increased by 0.5% to reach $4,265.22 an ounce by 0330 GMT, following a 4.4% climb in the previous session. December U.S. gold futures also rose 0.5% to $4,324.60 after gaining 4% on Wednesday. The positive momentum was supported by declining Treasury yields and a weakening dollar, impacting the broader precious metals sector.
Gold’s rally on Thursday kept its price above the 50-day moving average near $4,160. During recent declines, bullion had mostly traded below this technical indicator. The current levels are more than 5% higher than Monday’s close and are comparable to prices seen on June 18. Despite the rally, gold prices remain below the peaks from May when spot prices surpassed $4,500 per ounce. Nonetheless, the recent surge has recovered a significant portion of the losses incurred during June and July.
U.S. Treasury yields dropped as gold prices gained strength, with the benchmark 10-year yield hovering near 4.61%, down from approximately 4.74% at the end of July. The two-year yield was close to 4.18% on Wednesday. Since gold does not pay interest, declining bond yields diminish the income gap between bullion and government debt. Additionally, the dollar weakened against several major currencies, reducing gold’s cost for buyers holding currencies other than the dollar.
Market shifts in bonds coincide with gold’s rally
The economic backdrop includes recent labor market data that influenced market sentiment. Private employers added 44,000 jobs in July, following a revised increase of 95,000 in June, marking the smallest monthly growth in six months. The Federal Reserve kept its benchmark interest rate between 3.5% and 3.75% on July 29. The broader employment report from the government, which covers both public and private sector hiring, remains scheduled for release on Friday.
Before Wednesday’s sharp rebound, gold faced persistent downward pressure. Spot prices hovered near $4,008 on July 20 and around $4,052 on August 3. The 4.4% increase on Wednesday represented the strongest one-day performance in approximately six months. Thursday’s gains kept the price near the upper end of recent trading ranges, with both spot and futures prices remaining well above their levels at the start of the week. Trading activity continued to focus on yield movements and currency fluctuations.
Central banks continue their gold accumulation
Official and institutional demand remained a key factor influencing the broader gold market. The World Gold Council reported a second-quarter demand of 1,269 metric tons, which included over-the-counter activity. This figure matched demand levels from the same period last year. First-half demand grew by 2% to 2,522 tons. During this period, countries such as Poland, Uzbekistan, China, and Kazakhstan emerged as some of the largest reported central-bank purchasers. Higher average prices also contributed to an increased total value of gold demand during the first half of the year.
Meanwhile, prices for other precious metals showed mixed results on Thursday. Silver dipped slightly by 0.1% to $62.02 an ounce, while platinum advanced 1.2% to $1,755.18. Palladium rose by 0.8% to $1,374.33, marking its third consecutive gain. Despite these movements, gold remained the market’s main focus following Wednesday’s surge. The metal’s prices stayed near a seven-week high, supported by declining Treasury yields and a softer dollar, extending a rebound that lifted bullion above recent critical levels.