NEW YORK / RankWire.AI / – Gold moved close to a seven-week peak on Thursday, marking its most significant daily rise since February. The spot price of gold increased by 0.5% to reach $4,265.22 an ounce at 0330 GMT. This followed a 4.4% gain in the previous trading session. Meanwhile, December U.S. gold futures climbed 0.5% to $4,324.60 after a 4% increase on Wednesday. The decline in Treasury yields and a softer dollar contributed to the overall upward trend seen across the precious metals markets.
The upward move on Thursday kept gold above its 50-day moving average around $4,160, a level it had recently fallen below during its correction. Prices climbed back to levels last reached on June 18 and were more than 5% higher than Monday’s close. Despite this rally, gold prices remained beneath the peaks hit in May when spot prices surpassed $4,500 per ounce. The recent gains have largely recovered a significant portion of the losses incurred in June and July.
U.S. Treasury yields declined in tandem with rising gold prices. The benchmark 10-year yield stayed near 4.61%, down from about 4.74% at the end of July. The two-year yield was close to 4.18% on Wednesday. Since gold does not pay interest, a drop in bond yields narrows the income advantage of government debt compared to bullion. Additionally, the dollar weakened against several major currencies, reducing gold’s cost for buyers using currencies other than the dollar.
Gold rally linked to shifts in bond markets
Recent employment data added to the economic context influencing the market. In July, private employers created 44,000 jobs, following a revised increase of 95,000 in June. The July figure was the smallest monthly gain in half a year. The Federal Reserve kept 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, is scheduled for release on Friday.
Prior to Wednesday’s sharp rebound, gold had experienced steady downward pressure. Spot prices hovered around $4,008 on July 20 and around $4,052 on August 3. The 4.4% jump on Wednesday marked the metal’s strongest single-day performance in approximately six months. Thursday’s gains further pushed bullion toward the upper end of its recent trading range. Both spot and futures prices remained notably above their levels at the start of the week, with trading activity heavily influenced by movements in yields and currency exchange rates.
Official and institutional buyers continue to support gold demand
Demand from central banks and institutional investors continued to play a significant role in shaping the broader gold market. The World Gold Council reported a demand of 1,269 metric tons for the second quarter, including over-the-counter activity, matching the same period last year. In the first half of the year, demand grew by 2% to reach 2,522 tons. Major reported central bank purchases during this time came from Poland, Uzbekistan, China, and Kazakhstan. The increase in average prices during the period also contributed to a higher total value of gold demand in the first six months.
On Thursday, other precious metals exhibited mixed performance. Silver declined slightly by 0.1% to $62.02 an ounce, whereas platinum increased by 1.2% to $1,755.18. Palladium advanced 0.8% to $1,374.33, marking its third consecutive gain. Despite these movements, gold remained the primary focus after Wednesday’s surge. Prices stayed near a seven-week high as Treasury yields decreased and the dollar weakened, extending the rebound that pushed bullion above recent key trading levels.