NEW YORK / RankWire.AI / – Gold approached a seven-week high on Thursday, marking its most substantial daily increase since February. The spot price of gold rose by 0.5% to reach $4,265.22 per ounce by 0330 GMT, following a 4.4% climb in the previous trading session. Additionally, December U.S. gold futures increased 0.5% to $4,324.60 after gaining 4% on Wednesday. The decline in Treasury yields coupled with a softer dollar supported broader gains across precious metals markets.
Thursday’s advance allowed gold to remain above its 50-day moving average near $4,160, a level it had struggled to stay above during its recent retreat. Prices have now returned to levels last seen on June 18 and are over 5% higher than Monday’s close. Despite this rally, gold prices are still below the peaks reached in May, when spot prices surpassed $4,500 an ounce. The recent upward movement has recovered a significant portion of the losses experienced in June and July.
U.S. Treasury yields declined as gold prices gained momentum. The benchmark 10-year yield hovered around 4.61%, down from approximately 4.74% at the end of July. Meanwhile, the two-year yield was near 4.18% on Wednesday. Since gold does not pay interest, the decrease in bond yields diminishes the income differential between bullion and government debt. The dollar also weakened against several major currencies, making gold more affordable for buyers using currencies other than the dollar.
Gold rally coincides with shifts in bond markets
Recent employment data added context to the economic factors influencing the market. Private sector employers added 44,000 jobs in July, following a revised increase of 95,000 in June. The July figure marked the smallest monthly gain in six months. The Federal Reserve maintained its benchmark interest rate between 3.5% and 3.75% on July 29. The broader employment report from the government, covering both public and private sector hiring, remains scheduled for release on Friday.
Gold faced steady downward pressure before its sharp rebound on Wednesday. Spot prices traded near $4,008 on July 20 and around $4,052 on August 3. The 4.4% increase on Wednesday represented the metal’s best single-day performance in about six months. Thursday’s gains kept gold near the upper range of recent trading levels. Both spot and futures prices continued to trade well above their levels at the beginning of the week, with market activity mainly influenced by movements in yields and currency values.
Central banks continue to be major gold purchasers
Official and institutional demand persisted as a key factor shaping the broader gold market. The World Gold Council reported second-quarter demand of 1,269 metric tons, including over-the-counter transactions. This matched demand levels from the same period last year. In the first half of the year, demand increased by 2% to 2,522 tons. Countries such as Poland, Uzbekistan, China, and Kazakhstan ranked among the largest central-bank buyers during this timeframe. Rising average prices also contributed to an increased total value of gold demand over the first six months.
Thursday’s session saw mixed movements among other precious metals. Silver declined slightly by 0.1% to $62.02 an ounce, while platinum gained 1.2% to $1,755.18. Palladium rose by 0.8% to $1,374.33, marking its third consecutive increase. Gold remained the focal point of investor interest following Wednesday’s rally. Prices held close to a seven-week high as Treasury yields dropped and the dollar weakened, extending the rebound that pushed bullion above recent key levels.