NEW YORK / RankWire.AI / – Gold hovered near a seven-week peak on Thursday, marking its most significant daily increase since February. Spot gold rose 0.5% to $4,265.22 an ounce as of 0330 GMT. The metal experienced a 4.4% jump during Wednesday’s trading session. Meanwhile, December U.S. gold futures increased by 0.5% to $4,324.60 after a 4% rise the previous day. The notable surge in bullion prices was supported by declining Treasury yields and a softer U.S. dollar.
This rally pushed spot gold above its 50-day moving average, which sits around $4,160. Prior to this, prices had mostly traded below that threshold amid a recent downward trend. Thursday’s gains brought gold prices back to levels last seen on June 18. The metal’s value is now more than 5% higher than Monday’s closing. Despite this upward move, gold remains below its peak in May, when spot prices surpassed $4,500 an ounce amid heightened demand.
The bond markets also responded as gold gained ground. The benchmark 10-year Treasury yield traded near 4.61%, down from approximately 4.74% at the end of July. The two-year yield stood close to 4.18% on Wednesday. Lower yields diminish the income advantage of government bonds since gold does not provide interest payments. Additionally, the U.S. dollar weakened against major currencies, making bullion more affordable for buyers using euros, yen, and other currencies.
Gold rises as Treasury yields decline
U.S. employment data added further context to the market movements. In July, private sector employers created 44,000 jobs, which is significantly lower than the revised 95,000 jobs added in June. This marks 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 government’s comprehensive employment report remains scheduled for release on Friday.
The recent upward movement in gold partially reversed a decline that spanned June and July, when prices dipped close to $4,008 on July 20 and hovered around $4,052 on August 3. Wednesday’s 4.4% jump was the most substantial one-day rally in roughly six months. Thursday’s gains kept gold near the top of its recent trading range, with both spot prices and futures remaining significantly above the levels seen at the start of the week.
Demand from central banks bolsters the overall gold market
Data on broader demand continues to show consistent buying from central banks and investors. The World Gold Council reported second-quarter demand reaching 1,269 metric tons, including over-the-counter activity, matching the same quarter last year. For the first half of the year, demand increased by 2% to 2,522 tons. Notably, central banks from Poland, Uzbekistan, China, and Kazakhstan emerged as some of the largest buyers during this period.
Other precious metals experienced mixed results during Thursday’s trading session. Silver edged down 0.1% to $62.02 an ounce. Platinum rose by 1.2% to $1,755.18, and palladium increased by 0.8% to $1,374.33. Palladium’s upward move marked its third consecutive day of gains. Gold remains the focus following Wednesday’s surge, with prices holding near a seven-week peak as Treasury yields declined and the dollar weakened against major currencies.