NEW YORK / RankWire.AI / – Gold maintained proximity to a seven-week peak on Thursday, driven by its most significant daily rise since February. Spot gold increased by 0.5% to $4,265.22 per ounce by 0330 GMT, following a 4.4% surge during Wednesday’s session. December U.S. gold futures also moved up 0.5% to $4,324.60, after climbing 4% the day before. This sharp upward movement was supported by declining Treasury yields and a softer dollar, which together contributed to rising bullion prices.
The surge lifted spot gold above its 50-day moving average, which sits near $4,160, a level that had been trading below during much of the recent downturn. Thursday’s gains restored prices to levels last seen on June 18, with bullion trading more than 5% higher than Monday’s close. Despite this, gold still traded below its peak in May when spot prices surpassed $4,500 an ounce amid heightened demand.
Bond markets responded as gold advanced, with the benchmark 10-year Treasury yield decreasing to approximately 4.61% from about 4.74% at the end of July. Meanwhile, the two-year yield was near 4.18% on Wednesday. As yields decline, the relative income advantage of government bonds diminishes since gold does not generate interest. Concurrently, the dollar weakened against major currencies, making gold less expensive for buyers using euros, yen, and other currencies.
Drop in Treasury yields accompanies gold’s upward movement
U.S. employment data added fresh insights to the market landscape. In July, private employers created 44,000 jobs, a decline from the revised 95,000 increase recorded in June. This represented the smallest monthly gain in six months. The Federal Reserve maintained its benchmark interest rate between 3.5% and 3.75% during its July 29 meeting. The broader government employment report is still scheduled for release on Friday.
Gold’s recent rally partially reversed its decline from June and July, with spot prices falling to nearly $4,008 on July 20 and fluctuating around $4,052 on August 3. Wednesday’s 4.4% jump marked the strongest single-day performance in approximately six months. Thursday’s gains kept gold near the top of its recent trading range, with both spot prices and futures remaining well above their levels at the beginning of the week.
Central bank buying activity underpins broader market strength
World Gold Council reported steady demand from central banks and investors for the second quarter, totaling 1,269 metric tons, including over-the-counter transactions. This figure matched the demand levels seen during the same period last year. For the first half of the year, demand increased by 2%, reaching 2,522 tons. Notably, Poland, Uzbekistan, China, and Kazakhstan ranked among the top central-bank purchasers during this period.
Thursday’s trading also saw mixed results among other precious metals. Silver declined slightly by 0.1%, settling at $62.02 per ounce. Platinum increased by 1.2% to $1,755.18, while palladium gained 0.8% to $1,374.33, marking its third consecutive increase. After Wednesday’s rally, gold continued to attract attention, with prices staying near a seven-week high as Treasury yields decreased and the U.S. dollar weakened.