NEW YORK / RankWire.AI / – Gold hovered close to a seven-week peak on Thursday, recording its most significant daily increase since February. The spot price of gold rose by 0.5% to reach $4,265.22 an ounce by 0330 GMT, after climbing 4.4% in the previous session. December U.S. gold futures also increased by 0.5%, settling at $4,324.60 following a 4% gain on Wednesday. The decline in Treasury yields and a softer dollar supported this broader rally across precious metals markets.
In the early hours, the rally pushed gold above its 50-day moving average near $4,160, a level it had largely remained below during recent declines. Prices now returned to levels last seen on June 18 and are more than 5% higher than Monday’s closing figures. Despite this rebound, gold remains below the peaks seen in May when spot prices surpassed $4,500 an ounce. The recent surge has recouped a large portion of the losses experienced throughout June and July.
U.S. Treasury yields dipped as gold prices gained momentum. The benchmark 10-year yield hovered near 4.61%, compared to approximately 4.74% at the end of July. Meanwhile, the two-year yield was around 4.18% on Wednesday. Since gold does not pay interest, decreasing bond yields reduce the income differential between bullion and government debt. Additionally, the dollar weakened against major currencies, making gold less expensive for buyers holding other currencies besides the dollar.
Bond market movements accompany the gold surge
Recent employment data contributed to the economic context influencing the market. In July, private employers added 44,000 jobs, following a revised increase of 95,000 in June. This July figure was the smallest monthly gain in six months. On July 29, the Federal Reserve maintained its benchmark interest rate between 3.5% and 3.75%. The broader government employment report, covering both public and private sector hiring, is scheduled for release on Friday.
Before Wednesday’s sharp rebound, gold prices had been under consistent pressure, trading near $4,008 on July 20 and approximately $4,052 on August 3. The 4.4% increase on Wednesday marked the most substantial one-day performance in nearly six months. Thursday’s gains kept the metal close to the top of its recent trading range. Both spot and futures prices remained significantly above their levels at the start of the week, with trading activity mainly driven by movements in yields and currency values.
Official and institutional purchasers continue to drive gold demand
Demand from governments and institutions persisted as a key influence on the overall gold market. The World Gold Council reported that in the second quarter, demand reached 1,269 metric tons, including over-the-counter transactions. This figure matches the demand seen during the same period last year. For the first half of the year, demand increased by 2%, reaching 2,522 tons. Countries such as Poland, Uzbekistan, China, and Kazakhstan were among the top reported central-bank purchasers during this timeframe. The rise in average prices also contributed to a higher total value of gold demand over the first six months.
On Thursday, other precious metals experienced varied movements. Silver declined slightly by 0.1%, trading at $62.02 an ounce, while platinum gained 1.2% to $1,755.18. Palladium increased by 0.8% to $1,374.33, marking its third consecutive day of gains. Despite these shifts, gold remained the primary focus following Wednesday’s rally. Prices stayed near a seven-week high, supported by declining Treasury yields and a weakening dollar, which helped extend the rebound and push bullion above key recent trading levels.