Gold hovers near early-June high on lower bond yields
BENGALURU: Gold hovered near its highest level in more than two months on Thursday after a surprise liquidity support announcement by the US Treasury pushed yields and the dollar lower.
On Thursday, gold prices neared a two-month high after the US Treasury announced a significant increase in liquidity support for longer-dated notes and bonds. At 0031 GMT, spot gold was trading at US$4,512.19 per ounce, just above its peak of $4,525.79 reached on June 2. The jump in gold prices came after a 4% surge on Wednesday.
US gold futures for December delivery also saw a 0.6% increase to US$4,569.80. The Treasury's decision to double its liquidity support operations for longer-term notes and bonds led to a decrease in yields, making greenback-priced metals more affordable for international buyers. The US debt has now surpassed the $40 trillion mark, prompting concerns about a potential fiscal crisis.
The Federal Reserve's meeting last month raised concerns about inflation, with some policymakers suggesting interest rate hikes to curb inflation and bring it back to the 2% target. Traders are currently anticipating a 67.3% probability of a rate hold and a 32.7% chance of a rate increase in September. Gold is typically viewed as a safe-haven asset during periods of economic and geopolitical uncertainty, although higher interest rates diminish its attractiveness due to the lack of income generation.
Among other metals, silver gained 0.2% to $67.06 per ounce, while platinum fell 0.4% to $1,816.78, and palladium increased by 0.3% to $1,339.05.
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- Gold hovers near early-June high on lower bond yields economictimes.indiatimes.com
